If you currently have a novated lease on an electric vehicle under the FBT exemption, changing jobs can raise an important question:
Will your EV tax benefit continue if you move to a new employer?
The answer depends on several factors, including the type of vehicle, the lease structure, your new employer’s salary packaging setup and how future FBT changes are legislated.
This guide explains what Australian employees should know before changing jobs while holding an EV novated lease.
First: What Makes an EV FBT-Exempt?
Under current ATO guidance, an electric car may be exempt from FBT if it meets the required conditions. These include that the vehicle is a zero or low emissions vehicle, was first held and used on or after 1 July 2022, is used by a current employee or their associate, and has never had luxury car tax payable on it. Salary packaged benefits can be included in this exemption.
This is why many employees have used electric vehicle novated leasing to reduce the overall cost of an eligible EV.
For employees still reviewing the basics, Fingo’s guide on how a novated lease works can help explain how salary packaging fits into the arrangement.
What Happens to a Novated Lease When You Change Employer?
A novated lease is connected to your employment because your employer is part of the salary packaging arrangement.
When you leave your job, the novation arrangement with your current employer usually ends. From there, you may have a few options:
- transfer the lease to your new employer if they offer novated leasing
- continue paying the finance component of the lease personally outside salary packaging
- refinance or restructure the arrangement
- pay out or end the lease, depending on your contract
Industry guidance from FleetPartners notes that if a new employer offers novated leasing, transferring the lease can be relatively straightforward, although paperwork and provider arrangements may be involved.
Fingo also has a practical guide on what happens to your novated lease when you change jobs.
Does Changing Employers Affect the EV FBT Exemption?
For a battery electric vehicle that still meets the ATO’s EV exemption conditions, changing employers does not automatically mean the vehicle itself stops being eligible.
However, there is an important practical issue.
Your new employer must be willing and able to enter into a new salary packaging or novation arrangement. If the vehicle is no longer being provided through an eligible employer arrangement, the salary packaging benefit may stop.
That means the key question is not only:
“Is the EV still eligible?”
It is also:
“Will my new employer support the arrangement?”
Before accepting a new role, employees should check whether the new employer offers novated leasing and whether their salary packaging provider can take over the lease.
Important Difference: BEVs vs PHEVs
This point matters because the rules are stricter for plug-in hybrids.
The ATO has confirmed that plug-in hybrid electric vehicles are no longer eligible as zero or low emissions vehicles from 1 April 2025, unless they meet narrow transitional conditions, including being used or available for private use before that date and being covered by a financially binding commitment that continues after that date.
Several providers note that changing employer may trigger a new commitment for PHEV arrangements, which can affect exemption eligibility. RemServ states that a change of employer can trigger a new commitment and loss of exemption for PHEVs, because the ATO views the new employer arrangement as a new commitment to the availability of the car.
So if your vehicle is a PHEV rather than a fully electric vehicle, changing employer may carry higher FBT risk.
How Do the New EV FBT Changes Affect Current Leases?
The Federal Budget announcement confirmed that the EV FBT exemption is being wound back in stages. Reports state that existing leases will not be affected by the announced changes.
This is important for employees who already have an eligible EV novated lease. If your current lease is grandfathered, the newly announced FBT changes may not affect your existing agreement while it remains in place.
However, if you change employer, the treatment may depend on whether the lease can continue under the same arrangement or whether a new commitment is created. This is an area where employees should seek provider confirmation, especially once final legislation and ATO guidance are available.
The Practical Risk When Changing Jobs
The biggest risk is not always the EV itself.
The risk is that changing employers may interrupt the salary packaging arrangement.
If your new employer does not offer novated leasing, you may need to:
- pay the lease directly from after-tax income
- pause salary packaging benefits
- restructure the lease
- consider refinancing or payout options
This can change your take-home pay and total ownership cost.
That is why many employees use a novated lease calculator before changing jobs or restructuring a lease, so they can compare different cost outcomes.
What You Should Check Before Changing Employer
Before moving jobs with an EV novated lease, check the following:
1. Does your new employer offer novated leasing?
If not, the lease may continue as a personal finance obligation rather than a salary packaged benefit.
2. Will your new employer accept your existing lease?
Some employers may have preferred providers or onboarding requirements.
3. Is your vehicle a BEV, hydrogen fuel cell vehicle or PHEV?
The FBT risk is different depending on the vehicle type.
4. Could the move create a new commitment?
This is especially important for PHEVs and may also become relevant for future grandfathering treatment after the announced EV FBT changes.
5. What happens to your budget if salary packaging stops?
Your payments may shift from salary packaging to direct after-tax payments.
For a wider explanation of bundled costs, see what’s included in a novated lease package.
What This Means for Your Current EV Novated Lease
If you already have an eligible battery electric vehicle under an FBT-exempt novated lease, your lease may continue to receive the benefit while your existing arrangement remains valid.
But if you change employers, you should not assume everything will carry over automatically.
Your outcome depends on:
- the new employer’s salary packaging policy
- whether the lease is transferred or restructured
- vehicle eligibility
- final rules around grandfathering
- provider interpretation once the changes are legislated
For employees with higher-priced EVs or leases close to future policy deadlines, this planning becomes even more important.
Bottom Line
If you change jobs while holding an EV novated lease, the car does not necessarily stop being eligible for FBT exemption.
But the salary packaging arrangement may change.
If your new employer supports novated leasing and your vehicle remains eligible, the arrangement may continue in some form. If not, you may lose the salary packaging advantage and need to pay the lease differently.
The newly announced EV FBT changes are not expected to affect existing leases directly, based on current reporting, but changing employer could create practical and tax questions that should be confirmed with your provider before you move.
Frequently Asked Questions
Will I lose my EV FBT exemption if I change jobs?
Not necessarily. If your EV remains eligible and your new employer supports novated leasing, the arrangement may continue. However, a new employer usually means a new salary packaging arrangement, so you should confirm the treatment before changing jobs.
Can I transfer my EV novated lease to a new employer?
Often, yes, if your new employer offers novated leasing and accepts the arrangement. The process usually involves setting up a new novation agreement.
What if my new employer does not offer novated leasing?
Your lease may continue, but you may need to make payments directly from after-tax income. This can change the financial outcome.
Will the 2027 and 2029 EV FBT changes affect my current lease?
Current reporting indicates existing leases will not be affected by the announced changes. However, the final treatment may depend on legislation, ATO guidance and whether your lease arrangement changes.
Are PHEVs treated the same as battery electric vehicles?
No. PHEVs have different transitional rules after 1 April 2025. Changing employer may create a new commitment and affect FBT exemption eligibility for PHEVs.
What should I do before accepting a new job?
Ask your new employer whether they offer novated leasing, confirm whether they can take over your current lease, and check with your salary packaging provider how the change may affect your FBT treatment.
