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Novated Leasing for Employees

A simple way to get a car using your before-tax salary.

At a glance: Novated leasing

A novated lease is a way to get a car through your employer using some of your before-tax salary.
It can help make managing your car costs simpler by combining expenses like finance, fuel or charging, registration, insurance and servicing into one structured payment.

Novated lease benefits

Tax savings: Access potential income tax savings by paying for your car and running costs from some or all of your before-tax salary depending on the car you choose
Fleet discounts: Our buying power means you get access to further fleet discounts on new cars
Save on GST: Depending on your employer, you could save GST on the purchase price of the car and the ongoing running costs for the life of your lease
Budget convenience: A simple regular payment covers your finance payment and your car’s regular expenses such as registration, insurance, fuel or charging, maintenance, tyres and roadside assistance
24/7 driver support: Enjoy peace of mind with 24/7 driver support, always on hand to offer advice in any way we can

What is a novated lease?

A novated lease allows you to finance your next new, used or existing car and it's running costs by accessing some of your salary before-tax. This means you could pay less income tax and take home more pay.

And if you decide to take out a novated lease on an eligible electric car, thanks to the Federal Government's Electric Car discount, all your cars' payments are made before-tax, which means you could take home even more pay.

You can access your before-tax salary, because a novated lease agreement includes an employee, their employer and a salary packaging provider like us!

This arrangement, unlike traditional methods of finance, means the cost to purchase a car and its running costs, could reduce income tax and give access to further GST savings, depending on your employer's policy. To put it simply, you won't finance up to $6,353 during the FY27 financial year for the GST on the purchase price or ongoing running costs with a novated lease.

Car on road

See the impact on your take-home pay

The potential benefit of a novated lease can be seen in your take-home pay compared to paying for a car from after-tax income.

Here’s a quick example:

If you’re earning $85,000 annually and choose a car worth around $39,700 on a 5-year novated lease, driving 15,000km per year:

  • Your take-home pay could increase by $43* per week
  • This could add up to $2,236* per year
  • Over 5 years, that's $11,180* more in take-home pay
Novated lease take home comparison

*Disclaimer: Income tax savings are dependent on your taxable income and individual tax status. GST savings are dependent on your employer’s policy and accounting treatment of GST. Figures may vary based on individual circumstances and are subject to change.

Banner promoting novated lease offers for electric vehicles

Why more employees are choosing novated leasing

Novated leasing is becoming a popular way for employees to manage their car expenses more simply and potentially more cost-effectively.

With a novated lease, you could:

  • Reduce your taxable income and pay less income tax
  • Save GST on eligible car and running costs
  • Access fleet pricing on new cars through Fleetcare
  • Make budgeting easier with more predictable car expenses
  • Drive a new car more often through upgrade opportunities
  • Spend less time managing multiple car-related bills
  • Take advantage of potential EV incentives, including the Electric Car Discount for eligible cars

How novated leasing works

A novated lease is a finance arrangement between you, your employer and a provider like Fleetcare.

Novated lease process and how it works

Is a novated lease right for me?

A novated lease may suit employees who want a more convenient way to manage their car costs and are considering a tax-effective way to structure car expenses.

It can be a good fit if you:

  • Want to bundle your car and running costs into one regular payment
  • Prefer predictable, structured budgeting for your car
  • Are considering upgrading to a new or different car
  • Drive regularly and want a more streamlined way to manage expenses
  • Are interested in salary packaging benefits through your employer

Before deciding, it’s important to understand how your lease structure, driving habits and employment situation may affect the overall outcome.

Fleetcare can help you assess whether a novated lease suits your needs - find out if a novated lease is right for you.

Couple driving

Driving electric could save you more

You can also get an electric or plug-in hybrid car through a novated lease.

Eligible EVs may qualify for the Electric Car Discount, which allows:

  • 100% before-tax payments
  • Opportunity for greater savings over the life of the lease
  • Lower running and maintenance costs

This could make electric cars more affordable and easier to manage, while also helping reduce fuel expenses and supporting a lower-emissions lifestyle - see how electric novated leasing works in practice.

With access to newer technology, advanced safety features and a growing public charging network, many employees are choosing EVs as a practical and cost-effective option through a novated lease.

Electric vehicle on charger

Am I eligible for a novated lease?

Many Australian employees may be eligible for a novated lease, although eligibility can vary depending on your employment situation and employer.

You’ll generally be eligible if you:

  • Are a full-time or part-time employee
  • Have completed your probation period
  • Receive a regular salary
  • Work for an employer that offers novated leasing

You may still be eligible if you are:

  • A contract or casual employee
  • New to your role
  • Working for an employer without an existing novated lease program

Your eligibility can also depend on factors like your income, employment stability and the type of car you choose.

If you’re unsure, Fleetcare can help you understand your options and whether a novated lease could work for you - check your novated lease eligiblity with Fleetcare.

Real experiences from everyday drivers

"This is my second lease with Fleetcare. I have 2 vehicles which I lease and I am very happy with the service provided."
MARK, Police Officer

Novated leasing FAQs

Can I put down a deposit or use a trade-in to reduce the cost of the car?

With Fleetcare, you can trade in a car as part of setting up your novated lease. However, trade-in funds can’t be used to reduce the lease principal. A novated lease is for full sale price of the car.

What happens at the end of my lease?

When you come to the end of your lease, you can:

  1. Trade in, trade up - Trade in your novated lease to Fleetcare (or sell it privately) and upgrade your car with a new lease.
  2. Refinance - Refinance and extend your novated lease residual amount for another lease term.
  3. Payout - Payout your novated lease residual amount and the car is yours.
What happens if I find I’m travelling more/less kilometres than nominated?

The simplest way to make changes is to contact your Fleetcare account manager. They can adjust your salary deductions and realign your payments at any time during your lease.

How are residual values calculated?

The residual value is set according to Australian Tax Office (ATO) guidelines. It’s based on the total amount financed and the length of your lease. Residuals ensure leases are structured differently to loans, reflecting expected car value at lease end.

Term of Lease Residual %
12 months 65.63%
24 months 56.25%
36 months 46.88%
48 months 37.50%
60 months 28.13%
What happens if I leave my employer?

If you leave your employer, you have 3 options:

  1. Re-novate - If your new employer offers novated leasing, you can transfer your Fleetcare novated lease to your new employer, and your lease will continue as normal.  
  2. Finance only - If your new employer doesn’t offer novated leasing, you can continue making finance only repayments. This option removes the salary packaging benefits, but allows you to keep the car and maintain the lease until it ends.
  3. Sell your car - You can choose to sell the car and use the proceeds to pay off the residual value.

For more novated leasing FAQs, visit our frequently asked questions page.

Enquire Now

Talk to a novated leasing specialist

Ready to get started with a novated lease? Speak to Fleetcare today and explore your options.

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Important Information: The information provided is for general informational purposes only and does not take into account your specific needs, circumstances, or objectives. It is strongly recommended that you consult with a qualified financial advisor before making any decisions based on this information. Fees, conditions, eligibility and credit approval criteria may apply.