A novated lease could be a cost-effective way to get the car you want. Not only could you enjoy possible tax savings, but you could also design a novated lease package to suit your budget and drive your dream MG sooner.
With just one, regular payment which covers your car finance and your budgeted running costs including, fuel or charging, servicing, registration, insurance, and tyres.
A novated lease is more than just a way to finance your next car. It allows almost any employee with a salary to unlock potential tax benefits.
Tax is taken out of your salary before you get paid - but through a novated lease, you can pay for your car and other related expenses before you pay tax. And by doing that, you could end up paying less income tax.
A novated lease allows you to use money from your salary before tax is taken out. This money is used not only for your vehicle’s repayments, but also general running costs, including petrol or charging, registration, insurance and servicing. You’ve got these big expenses pre-budgeted for, while potentially reducing your taxable income.
Owning a car outright or using a traditional car loan means your payments and/or general running costs are all made with post-tax dollars.
The Electric Car Discount is an initiative from the Federal Government to help make EVs more affordable by exempting eligible cars from Fringe Benefits Tax. To take advantage of the Discount, your novated lease vehicle needs to be:
Oly can help you get set up with the discount and FBT exemptions if you take out a novated lease on an eligible EV. Click here for more details.
*From 1 April 2025, a plug-in hybrid electric vehicle is no longer considered a zero or low emissions vehicle under FBT law. However, your employer can continue to apply the exemption if both the following requirements are met: 1) Use of the plug-in hybrid electric vehicle was exempt before 1 April 2025. 2) You have a financially binding commitment to continue using the vehicle for private use on and after 1 April 2025. For this purpose, any optional extension of the agreement is not considered binding. To qualify for the EV discount, plug-in hybrid electric vehicles must have been delivered by midnight on 31 March 2025.
FBT stands for Fringe Benefits Tax, which is a tax applied to benefits you receive through your employer that aren’t a salary. A novated lease is considered a fringe benefit.
Because novated leases incur FBT, it is recommended to make post-tax contributions to offset the FBT liability. This is known as ECM, or the employee contribution method, because the employee (you) is the one making the contributions.
If you have an eligible electric vehicle, your lease could be exempt from FBT requiring no post tax contribution, thanks to the Electric Car Discount.
Yes, you can claim electricity for charging an EV – both at home or at a public charging station. However, only one of these methods can be claimed per Fringe Benefits Tax year (which goes from 1 April – 31 March).
Currently, the installation and cost of home charging station cannot be claimed under a novated lease agreement.
The good news about novated leases is that they could move with you if you change employers. Even though your employer manages your lease payments via your salary, the lease is in your name.
If you change jobs during your lease term, speak to your new employer about transferring the lease to your new organisation.
Alternatively, you could choose to buy your car outright by paying the residual value or keep making payments with post-tax dollars.
There are four options at the end of your lease:
1.Take out a new lease on a new car.
2.Extend your current lease on your current car.
3.Buy your current car outright by paying the residual value.
4.Return your current car and pay any residual owing once the vehicle is sold.
For more details, visit here.
We’re teaming up with Oly to make novated leasing straight forward and easy to understand. Whether you’re exploring your options or ready to make the switch, Oly unlocks the door to novated leasing and could help put you behind the wheel of your next MG.
Find out more about Oly here.
Important information about calculations
All calculations on this website are for illustrative purposes only and use PAYG tax rates effective 1 July 2024.
Novated leasing calculations assume that:
Please contact Oly for an accurate estimate of your annual net benefit, leasing costs and the fees that may be applicable to you.
This calculator provides general information only by using some generic taxation scenarios and some publicly available general material published on the ATO's website. It does not offer a complete overview of applicable taxation methods.
For electric vehicles, plug-in-hybrid vehicles and plug-in hydrogen fuel cell vehicles, please consider the following:
*Displayed price is only available through a novated lease administered by Oly in Queensland. Government duties and charges may vary the weekly pricing in other states and territories. Weekly costs have been determined based on the following assumptions: 1) The lease is a Oly fully maintained lease, 2) A 5 year term, 3) A residual value of 28.13% of the vehicle purchase price payable at the end of term, 4) Inclusion of finance and budgeted costs for: fuel or electricity, 4 replacement tyres, maintenance, roadside assistance, registration, CTP and comprehensive insurance, 5) Gross annual salary is $90,000. 6) Vehicle purchased in QLD, 7) 15,000km per annum, 8) Salary Sacrifice using Employee Contribution Method (ECM). The Fringe Benefits Tax Exempt Method is only used for eligible electric vehicles under the luxury car tax threshold of $91,387. The indicative price quoted for the novated lease is based on vehicle quotations received within the last 45 days and does not include any optional extras. Any optional extras that you choose will affect the cost of the novated lease and residual value. If you purchase the vehicle on termination of the novated lease, GST will apply on the purchase price you pay at that time. The novated lease offer is based on the assumption outlined above, and is an indicative cost approximation of the selected vehicle and model shown and the amounts may change at the time the novated lease quotation is completed and finalised. Your individual circumstances have not been taken into account as this will affect the overall weekly cost amount and the benefits of a novated lease. These specials cannot be used in conjunction with any other offer. From 1 April 2025, a plug-in hybrid electric vehicle will not be considered a zero or low emissions vehicle under the FBT legislation. However, you can continue to apply the exemption if both the following requirements are met: 1) Use of the plug-in hybrid electric vehicle was exempt before 1 April 2025. 2) You have a financially binding commitment to continue providing private use of the vehicle on and after 1 April 2025. For this purpose, any optional extension of the agreement is not considered binding.
^Savings shown are indicative and reflect estimated tax savings over the full-term of the lease. The total amount saved is a comparison between a novated lease based on the assumption outlined above and the purchase of a vehicle and payment of running and maintenance costs using post-tax earnings. Actual savings will depend on your personal circumstances. Oly recommends that you seek independent financial and taxation advice. #Please note that stock levels vary from time-to-time and so certain vehicles may not be available at the time of enquiry.
Things you need to know: This general information doesn’t take your personal circumstances into account. Please consider whether this information is right for you before making a decision and seek professional independent tax and financial advice. Conditions and fees apply, along with credit assessment criteria for lease and loan products. The availability of benefits is subject to your employer’s approval. Oly may pay and/or receive commissions in connection with its services. Actual vehicle prices are based on specific vehicle and accessories, prices and savings may vary based on additional options selected with vehicle. Oly does not act as your agent or representative in respect of the purchase of any vehicle. Oly does not provide any advice or recommendations in relation to the purchase of any vehicle.
Please note: The content of this page is provided to you on the condition that you undertake all responsibility for assessing the accuracy of the content. Oly gives no guarantee and accepts no liability for the quality, safety or standard of motor vehicles or parts referred to or the truth or accuracy of the information contained on this page except to the extent required by law including, but not limited to, consumer guarantees under the Australia Consumer Law. You acknowledge that any images shown on this page are for illustration purposes only and may not be an exact representation of the motor vehicle on offer. The specifications you choose may affect the price you pay.
