Super & packaging
Novated Lease And Take-Home Pay
Short answer
A novated lease pays for a car from your pre-tax salary through your employer, cutting your taxable income and the tax on it at your 30% or 37% marginal rate. It also cuts take-home pay, and fringe benefits tax rules apply, so the net result depends on the vehicle, the term and your income.
How it works
Lease and running costs come out of your salary, partly before tax. This lowers taxable income but also your cash pay. Eligible electric vehicles can attract concessions. The benefit varies a lot by vehicle and usage.
Watch the details
Fringe benefits tax, the post-tax employee contribution, residual values and running-cost estimates all affect the outcome. Treat any 'savings' figure with care and get tailored advice.
Frequently asked questions
Does a novated lease save tax?+
It can lower taxable income, but FBT and the lease structure determine the real benefit.
Does it lower my take-home pay?+
Yes - lease and running costs come out of your salary.
Is it always worth it?+
No - it depends on the vehicle, your usage and your income. Seek tailored advice.
Sources & methodology
- ATO - Personal income tax: new tax cuts (15% rate from 1 July 2026)
- Income Tax Rates Act 1986 (legislation.gov.au)
- ATO - Study and training loan repayment thresholds and rates
- ATO - Super guarantee
- ATO - Contribution caps
- ATO - Payday Super and the annual maximum contribution base
- ATO - Medicare levy
- ATO - Medicare levy surcharge income thresholds and rates
- Fair Work Ombudsman - Pay slips
- How we calculate these estimates
Last updated 13 August 2026. Figures use the 2026-27 financial year.
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