Calculate how much you can save with an electric vehicle novated lease in Australia. Eligible EVs under the luxury car tax threshold are FBT-exempt, which can materially reduce after-tax ownership costs.
01 —INPUTS
FBT exemption: BEV/FCEV only; PHEVs eligible only with pre-1-Apr-2025 commitment.
Must be on/after 1 July 2022 for any exemption.
RFBA from a novated lease adds to income-for-MLS purposes even when FBT is $0.
Residual: 28.13%
Running Cost Settings
02 —RESULTS
Enter your salary and vehicle price to compare EV vs Petrol novated lease costs
Since 1 July 2022, eligible electric vehicles provided through novated leases are
exempt from Fringe Benefits Tax (FBT). This is a significant benefit
because FBT can add thousands of dollars to the cost of a salary-packaged vehicle.
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No FBT
EVs under $91,387 are completely FBT-exempt, saving thousands per year
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Pre-Tax Payments
Lease and running costs come from pre-tax salary, reducing your taxable income
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Lower Running Costs
Electricity is ~70% cheaper than petrol, plus EVs need less servicing
Which Vehicles Qualify?
To qualify for the FBT exemption, the vehicle must meet these criteria:
Zero or low emissions: Battery electric, hydrogen fuel cell, or plug-in hybrid (until April 2025)
First used after 1 July 2022: New or demonstrator vehicles meeting this date
Below LCT threshold: Vehicle price under $91,387 (2025-26)
Popular FBT-Exempt EVs
Tesla Model 3From ~$55,000
BYD Atto 3From ~$45,000
MG4From ~$40,000
Hyundai Ioniq 5From ~$55,000
Kia EV6From ~$65,000
Polestar 2From ~$60,000
Frequently asked questions
What is the EV FBT exemption?
From 1 July 2022, electric vehicles (EVs) provided through novated leases are exempt from Fringe Benefits Tax (FBT) if the vehicle price is below the luxury car tax threshold ($91,387 for fuel-efficient vehicles in 2025-26). This makes EVs significantly cheaper through salary packaging.
How much can I save with an EV novated lease?
Savings depend on your income and the vehicle price. Typically, an EV novated lease saves $5,000-$15,000+ per year compared to buying privately, due to no FBT, pre-tax salary deductions, and lower running costs (electricity vs petrol).
Does the FBT exemption apply to plug-in hybrids?
From 1 April 2025, PHEVs are no longer a qualifying electric car for the exemption. PHEVs can remain exempt only if (a) their use was exempt before 1 April 2025 AND (b) there is a financially binding commitment in place before that date to continue providing the car for private use. Without that pre-existing commitment, any PHEV entering a novated lease today faces full FBT under the statutory formula.
Do I still have to report anything if my EV is FBT-exempt?
Yes. Even when FBT payable is $0, the employer must report the grossed-up notional taxable value on your income statement as a Reportable Fringe Benefits Amount (RFBA). The RFBA flows into income tests for the Medicare Levy Surcharge, HELP repayments, Division 293 super tax, Family Tax Benefit, Child Care Subsidy, spouse super tax offset and the Private Health Rebate — so a "tax-free" EV can still push you into a higher MLS tier or past the $250k Div 293 threshold. The gross-up uses the Type 2 rate (1.8868 for 2025-26).
What changed with the LCT 'fuel-efficient' definition on 1 July 2025?
From 1 July 2025 the fuel-efficient threshold ($91,387) applies only to vehicles with advertised combined fuel consumption under 3.5 L/100 km — tightened from the previous 7 L/100 km. Most PHEVs and hybrids no longer meet this narrower definition, so they fall back to the lower $80,567 threshold. BEVs and FCEVs are unaffected because they have no direct fuel consumption.
What happens if the EV costs more than $91,387?
If the vehicle price exceeds the luxury car tax threshold, FBT will apply to the entire vehicle value. The savings from salary packaging will still exist, but the FBT cost will significantly reduce the overall benefit. Consider a lower-priced model to maximise savings.
Can I use my existing car for a novated lease?
For the FBT exemption, the vehicle must be "first held and used" after 1 July 2022. This means existing cars don't qualify for the exemption. However, you can still novate an existing car – you just won't get the FBT benefit.
What's included in the novated lease running costs?
Running costs typically include: electricity/fuel, comprehensive insurance, registration and CTP, scheduled servicing, tyres, and roadside assistance. All these costs come from your pre-tax salary, maximising your tax savings.
Tax Accuracy & Sources
Reviewed: March 2026 · Tax year: 2025-26
Estimates EV novated lease savings based on FBT exemption rules and pre-tax salary deductions. Does not account for fringe benefits reportable amounts, employer-specific salary packaging rules, or residual value calculations.