Electric vehicles have changed the novated leasing landscape in Australia. With the Fringe Benefits Tax exemption still applying to eligible EVs in 2026, many employees are discovering that driving electric can cost significantly less than expected.
If you are considering an EV, the fastest way to understand the benefit is to use an EV novated lease calculator and see your FBT free quote instantly, based on current tax rules.
Why EV Novated Leases Are FBT Free
Under current legislation, eligible electric vehicles that fall below the Luxury Car Tax threshold for fuel-efficient vehicles qualify for a Fringe Benefits Tax exemption. This means no FBT is payable on the lease, which can dramatically reduce the running and ownership costs.
Unlike petrol vehicles, where FBT often needs to be offset using post tax contributions (Employeee Contribution Method), EV novated leases can be structured with no FBT impact at all. This is one of the main reasons EVs have become so attractive for salary packaging.
How an EV Novated Lease Calculator Helps
An EV novated lease calculator applies the FBT exemption along with income tax and running cost assumptions to show the estimated cost of driving electric.
By entering a few details, you can:
- See how zero FBT affects the running costs
- Compare EV costs to petrol vehicles
- Understand total ownership costs under current tax rules
To see how this applies to your situation, you can calculate your savings using up to date EV assumptions.
Why EVs Can Be Cheaper Than Petrol Cars
Many drivers are surprised to find that a higher priced EV can cost less per week than a cheaper petrol car. This is due to the combined impact of:
- The FBT exemption
- GST treatment on the vehicle purchase
- Lower running and maintenance costs
Using a novated lease savings calculator allows you to see these differences clearly and compare options side by side.
What Is Included in an FBT-Free EV Quote
An FBT free EV quote typically factors in:
- Vehicle purchase price and eligibility
- Income tax impact
- Charging and electricity costs
- Servicing and maintenance
- Registration and insurance
Applying these inputs together helps ensure the estimate reflects real world costs rather than just finance repayments.
Important 2026 EV Considerations
While fully electric vehicles remain eligible for the FBT exemption, plug in hybrid vehicles are no longer covered following the expiry of the exemption in April 2025. This means it is important to confirm eligibility before comparing vehicles.
Using a novated lease calculator including tax savings ensures current rules are applied correctly when assessing EV options.
Frequently Asked Questions
Can I compare EV and petrol vehicles using the calculator?
Yes. Many calculators allow you to compare EV and petrol vehicles to see how tax treatment and running costs differ.
Do EV novated leases include running costs?
They can. Electricity, servicing, registration, and insurance are often included to give a clearer picture of total costs.
Is the EV FBT exemption still available in 2026?
Yes, for eligible fully electric vehicles. Plug in hybrid vehicles are no longer exempt.
Is an EV novated lease only beneficial for high income earners?
While higher income earners often see larger savings, many middle income earners also benefit due to the FBT exemption.
How do I get an FBT-free EV quote?
The quickest way is to apply your income and vehicle details through an EV focused novated lease calculation that reflects current tax rules.