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How to Use the Novated Lease Calculator

This guide will help you use the calculator. The sentences are short. The examples are simple. You do not need to be a finance expert.

Glossary of Terms

Drive away price
The total cost of the car. It includes GST, registration, and stamp duty.

Lease term
The number of years you will lease the car. Usually 1 to 5 years.

Gross salary
Your income before tax is taken out. It is on your payslip.

Kilometres
How far you drive each year. More kilometres can affect your tax.

Fuel budget
The money you spend on petrol or charging each week.

Running costs
Yearly expenses like rego, insurance, servicing, and tyres.

Interest rate
The percentage a financier charges you to borrow money for the car.

Residual value
The final payment at the end of the lease. The ATO sets minimum amounts.

Take home pay
The money you actually receive in your bank account after tax.

Tax saving
The amount of tax you do not have to pay because of the lease.

What is a Novated Lease?

A novated lease is a car payment plan. Your employer takes money from your pay before tax. This lowers your tax bill. You also pay for fuel and servicing this way. It can save you money.

Step by Step: How to Use the Calculator

1 Enter the car drive away price

Type the full price of the car. Include everything. Do not forget GST, rego, and stamp duty.

Simple example: Tom wants a car that costs $30,000 drive away. He types 30000.

2 Pick your lease term

Choose how many years you want the lease to last. Three years is the most common choice.

Simple example: Tom wants the car for 3 years. He selects "3 years" from the menu.

3 Enter your yearly salary before tax

Look at your payslip. Find the number before any money is taken out. Type that number.

Simple example: Tom earns $70,000 per year before tax. He types 70000.

4 Choose your yearly kilometres

Think about how much you drive. Work, school, shopping, trips. Pick the closest option.

Simple example: Tom drives 12,000 km each year. He picks "15,000 km" from the list.

5 Enter your weekly fuel or charging cost

How much do you spend on petrol each week? If you are not sure, use $50 as a starting point.

Simple example: Tom spends $55 on petrol every week. He types 55.

6 Enter your yearly running costs

Add up rego, insurance, servicing, and tyres. Most cars cost $2,000 to $3,000 per year.

Simple example: Tom's rego is $800. Insurance is $1,000. Servicing is $500. Total is $2,300. He types 2300.

7 Enter the interest rate

Ask your lease company for their rate. It is usually between 6% and 10%. If you do not know, use 8.

Simple example: Tom's lease company charges 7.9%. He types 7.9.

8 Click the purple button

Press "Calculate Novated Lease". The calculator will show your results on the right side.

Understanding the Results (Explained Simply)

Weekly reduction in take home pay

This is the most important number. It tells you how much less money you will see in your bank account each week. This amount covers the car, fuel, insurance, and servicing all together.

Tom's result: The calculator shows Tom will pay $165 less each week. That means his bank account gets $165 less. But he does not pay for fuel or servicing separately anymore.

Annual income tax saved

This is how much tax you save each year. The government takes less money from your pay because of the lease.

Tom's result: The calculator shows Tom saves about $2,800 in tax every year.

Weekly lease payment

This is just the car payment. It does not include fuel or servicing. Think of it like a car loan payment.

Tom's result: The calculator shows Tom pays $140 each week for the car itself.

Residual value

This is the final payment at the end of the lease. You pay this if you want to keep the car. The ATO decides the minimum percentage.

Tom's result: After 3 years, Tom owes $14,000 to own the car. That is the residual.

A Full Example Like You Are 10 Years Old

Meet Sarah. She is 30 years old. She wants a new car.

The car costs $40,000 drive away. Sarah earns $85,000 per year. She drives 15,000 km each year. She spends $60 on petrol every week. Her running costs are $2,500 per year. Her interest rate is 8%.

Sarah types all these numbers into the calculator. She clicks the purple button.

The calculator says: Her weekly pay will drop by $190. But she saves $3,200 in tax each year. Her weekly car payment is $160. After 3 years, she owes $18,700 to keep the car.

What does this mean for Sarah? She pays $190 each week. That gives her a car, petrol, insurance, and servicing. She does not have to think about separate bills. And she pays less tax.

Quick Tips

Use real numbers from your payslip and bills.
If you are not sure about a number, guess a little higher.
Electric cars have lower fuel costs. Enter a smaller number for fuel.
You can change numbers anytime. Just type new ones and click calculate again.
The calculator does not store your numbers. Your privacy is safe.

Common Questions

Can I use this for a used car? Yes. Enter the used car price.
Does this work for electric cars? Yes. Just enter your charging cost.
Why does my result look different from a quote? Different companies have different fees. This is an estimate.
Do I need to create an account? No. The calculator is free. No sign up needed.

Now you are ready. Go to the homepage and try the calculator. If you need help, visit our contact page.