EV Novated Lease FBT Calculator
Check whether an electric car still qualifies for the FBT exemption on a novated lease, and see exactly what the phase-out starting April 2027 does to it. Enter the price and the date the lease would start.
FBT treatment
What this calculator does, and what it deliberately does not
It answers one question precisely: what FBT treatment applies to a particular electric car on a novated lease, and what that treatment is worth per year. That is the part of the arrangement set by legislation rather than by your employer, your salary or the leasing company, so it is the part that can be stated with confidence.
It does not model a whole novated lease. It does not know your salary, your marginal tax rate, the lease interest rate, the residual value, the running costs bundled into the package or the fees your employer's leasing provider charges. Those vary enormously between employers and providers, and any calculator claiming a single "you will save $X" figure without them is guessing. Your provider's quote is the number that matters; this page tells you whether the largest single concession behind that quote applies to your car and your timing.
How the figure is worked out
Fringe benefits tax on a car provided through a novated lease is normally calculated with the statutory formula method:
FBT = car value × statutory rate × gross-up factor × FBT rate
The statutory rate is 20 per cent, the type 1 gross-up factor is 2.0802 where the employer can claim GST credits, and the FBT rate is 47 per cent. For a $60,000 car that comes to roughly $11,700 a year of FBT that somebody has to fund. The electric car exemption removes it entirely; the discounted band replaces the 20 per cent statutory rate with 15 per cent, which is where the "25 per cent discount" figure comes from.
The comparison strip above shows the same car under each phase of the phase-out, so you can see what signing before or after each date is worth.
The phase-out, in plain terms
The electric car FBT exemption is being wound back in stages. Which stage applies to you is fixed by when the arrangement starts, not by the current date — and once it starts, it keeps that treatment.
Until 31 March 2027 — full exemption
An eligible battery electric vehicle priced at or under the fuel-efficient luxury car tax threshold is fully FBT exempt. The threshold is indexed each year and is $91,387 at the time of writing. Above the threshold there is no concession at all — it is a hard cliff, not a taper, which is why cars are so often specified to land just underneath it.
1 April 2027 to 31 March 2029 — narrowed
The full exemption survives only for EVs priced at $75,000 or less. Between $75,000 and the luxury car tax threshold a 25 per cent discount applies instead, delivered as a 15 per cent statutory rate rather than the standard 20 per cent. Above the threshold, still nothing.
From 1 April 2029 — discount only
The full exemption ends. Eligible EVs up to the luxury car tax threshold get the 25 per cent discount, and that is the whole concession.
Existing leases are grandfathered
An arrangement already running keeps the treatment that applied when it started, for the life of that arrangement, regardless of these dates. That protection depends on the arrangement not being materially changed — refinancing it, or swapping the vehicle, can restart the clock under whatever rules apply then. If you are close to a threshold date, this is worth raising with your provider before making changes.
Plug-in hybrids
PHEVs stopped being eligible for new arrangements from 1 April 2025. A PHEV lease entered into before that date keeps its exemption under the same grandfathering principle, but a new one gets nothing. Selecting plug-in hybrid above reflects that.
Why this is not financial advice
This page is a reference tool, not advice, and the site is not licensed to give any. Whether a novated lease actually leaves you better off depends on your income, your employer's policy, the provider's fees and interest rate, the residual you will owe at the end, how long you keep the car and what it is worth when you do. The FBT exemption is a large input into that decision but it is not the decision.
Tax rules also change — this schedule is itself the result of a change — and thresholds are indexed annually. Check the current position with the ATO or a registered tax agent before committing, and treat anything here as a starting point for that conversation rather than a substitute for it. If you spot a figure on this page that has gone out of date, please tell us.
Frequently asked questions
Does the FBT exemption still apply in 2026?
Yes. For an eligible battery electric vehicle priced at or under the fuel-efficient luxury car tax threshold, the full exemption applies to arrangements starting up to 31 March 2027. The narrowing begins on 1 April 2027, when the full exemption is limited to EVs of $75,000 or less, and the exemption ends altogether on 1 April 2029, leaving only a 25 per cent discount. What matters is the date your arrangement starts, not the date you are reading this.
What happens to my lease if it is already running when the rules change?
Nothing. Existing arrangements are grandfathered at the treatment that applied when they commenced, and they keep it for the life of the arrangement. The important caveat is that this depends on the arrangement not being materially changed. Refinancing, or replacing the vehicle under the same lease, can put you under whatever rules apply at that point. Ask your provider before making changes if you are relying on grandfathered treatment.
What counts as the car's value for the threshold?
Broadly the GST-inclusive cost of the car including dealer delivery and most optional extras fitted before delivery, which is why adding options can push a car over a threshold it would otherwise have sat under. Because the thresholds are cliffs rather than tapers, a few hundred dollars of accessories can cost several thousand dollars a year in FBT. Confirm the exact figure with your leasing provider, as the calculation has details this summary does not cover.
Why does a plug-in hybrid get nothing?
Plug-in hybrids were included in the original electric car discount but lost eligibility for new arrangements from 1 April 2025. A PHEV novated lease entered into before that date keeps its exemption under the usual grandfathering, but one entered into now does not qualify. Battery electric vehicles remain eligible under the phase-out schedule above.
Is a novated lease actually worth it for an EV?
Often, but not automatically, and this page cannot tell you. The exemption is a genuinely large concession, worth several thousand dollars a year on a typical car, and it is the reason EV novated leasing became popular. Against that sit the provider's fees and interest rate, the residual value you owe at the end, and the fact that you do not own the car during the lease. Get a full quote, check what running costs are bundled into it, and compare the total against simply buying the car. The exemption improves the arithmetic; it does not settle it.
Does the exemption mean the car is completely tax free?
Not quite. The benefit is exempt from FBT, but the value of the benefit still counts as a reportable fringe benefit on your income statement in most cases. That figure does not attract income tax, but it is used in tests for things like the Medicare levy surcharge, private health insurance rebates, child support obligations and some government payments. For most people the effect is small; for people near a threshold on one of those tests it may not be. It is worth checking if any of those apply to you.
