Novated Lease Calculator

Crunch the numbers on your novated lease deal to see what’s affordable for you before you apply with Savvy.

Written by 
Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
Our authors
, updated on July 4th, 2023       

Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

Novated leasing calculator

Novated leasing is a great way to enable you to buy the car you want in a manageable and affordable way. However, it’s important to have an idea of how much your lease will cost you, which is where Savvy’s salary sacrifice novated car lease calculator comes in handy. Work out how much you can afford and get a novated lease quote with Savvy fast.

How do I use the salary sacrifice novated car lease calculator?

Our salary sacrifice novated car lease calculator is simple to use and tells you exactly what you need to know about the cost of your leasing arrangement. Firstly, enter the purchase price of the vehicle you’re looking to buy. From there, you can use the novated lease calculator with a balloon payment (or residual payment) to see how it affects the cost of your monthly instalments. You can also do this with interest rates and leasing terms.

Finally, you can select whether to make your payments in arrears (at the end of the month) or in advance (at the start of the month), with the former saving you slightly more overall. Once you’ve entered all of this information into the calculator, it’ll show you a monthly repayment figure and the overall interest due to be paid as part of the agreement. It’ll also show a graph of how the balance on the car purchase decreases over time.

All of this information together should put you in a position to make an informed choice on which offer is best for you. Fortunately, Savvy does the hard work for you. Once you fill out a quick form, our diligent and experienced consultants get to work finding the best novated lease for your situation. Your novated lease is in safe hands when you apply with Savvy.

What are the residual payment requirements for novated leases?

Novated leases come with mandatory minimum amounts as implemented by the Australian Tax Office (ATO). These serve as guidelines for novated lease providers as to how much they should accept as a balloon payment at the conclusion of the lease. They’re set based on the term length you select for your lease and are as follows:

  • 12-month (one-year) lease: 65.63%
  • 24-month (two-year) lease: 56.25%
  • 36-month (three-year) lease: 46.88%
  • 48-month (four-year) lease: 37.5%
  • 60-month (five-year) lease: 28.13%

These only serve as required minimums, meaning you may find your novated lease provider requires a greater residual amount to be paid at the end of the lease. With this information, you can calculate the approximate value of your residual amount on the car you're looking to purchase. For example, you can determine that on a $50,000, five-year lease, your residual value is likely to be around $14,065, which you can then input in the balloon payment section of the novated lease calculator.

How do I apply for a novated lease?

Applying for your novated lease is simple and effective when you do it with Savvy. Firstly, fill out a quick online novated lease quote on our website. This tells us a bit about you and your situation, as well as the type of car and agreement you’re looking for. From there, one of our consultants will consider your application and match your profile against our panel of lease providers to determine which is the most likely to offer the best deal for you.

Once they’ve done this and calculated your interest rate and potential borrowing power, they’ll return to you with the details of the best available offer. If you’re happy with it, they’ll proceed with your formal application and prepare and submit it to your provider to ensure its accuracy. You’ll also have to provide various pieces of documentation, such as photo ID and payslips, as well as your employer’s details, as they’ll be responsible for paying the lease.  You can expect this overall process to take just a few days before you’re driving away in your new car.

The features and benefits of novated leasing

Affordable and competitive rates

We're partnered with novated leasing companies who can offer highly competitive interest rates, enabling you to reduce the overall cost of your lease.

Choose your term length

Leases give you the option to decide between terms of one and five years, enabling you to customise your agreement to suit your personal financial needs and income limitations.

Various tax deductions available

You’ll be able to claim insurance premiums, roadside assistance, repairs or maintenance and even petrol as a tax deduction with a novated lease, with the cost of GST and depreciation also claimed by your employer.

No usage requirements

Unlike other car leases which require you to use the vehicle for business purposes, you’re able to use your car privately and however you like with this type of lease.

Reduce your taxable income

By having your leasing payments taken out of your pre-tax income by your employer, the amount of income tax you’ll have to pay overall is reduced, which could be significant if you move into another tax bracket.

Select a new or used car to lease

You’re not limited to brand-new vehicles when it comes to leasing, with cars available up to ten years old from the beginning of your lease (or 15 at its conclusion).

Common novated lease questions

How do I qualify for a novated leasing agreement?

The eligibility for novated leasing varies between different providers but, for the most part, it’s similar to how you qualify for other car finance. This also includes:

  • Hold full-time or permanent part-time employment outside of your probationary period
  • Be employed at a company which offers novated leasing
  • Be paying tax
Should I get a car loan instead?

Car loans are an alternative to novated leasing whereby you own the vehicle from the outset, but there are various pros and cons to consider. Car loans come without the tax benefits which are offered with novated leases, with no ability to claim for things such as on-road expenses, maintenance and depreciation. Repayments are also lower on a month-to-month basis. However, car loans come without residual payments, meaning you won’t have to contribute a lump sum at the conclusion of the agreement. You’ll also likely be charged Fringe Benefits Tax (FBT) on a novated lease, which could add up to thousands of dollars.

Who is the best novated lease company?

It’s important to compare the top novated lease companies when considering which provider to go with for your car purchase. However, the best company for one individual is unlikely to be the best for another. As such, speaking with a Savvy consultant is one of the best ways to accurately determine which option is best for you.

Can I still take out a novated lease for my business?

No – because novated leasing is available to employees who are working for a business which offers salary packaging, it’s not really applicable to business owners. However, you can definitely lease a car for your business with a car lease instead, which takes the salary packaging out of the equation and enables you and your business to lease the car directly.

Does it matter where I live?

No – because novated leasing takes place online, you can be approved regardless of whether you’re leasing in Brisbane, Perth, Adelaide, Sydney, Melbourne or anywhere else. This is especially useful for those living in the country without readily available leasing locations, so you can find the best lease for your needs here with Savvy.

Am I able to lease a luxury car?

Yes – provided you meet your lender’s requirements for covering its cost, you can be approved for a luxury car lease. This is often a highly affordable way to obtain a luxury car, as they’re much more difficult to buy with cash for most employees.

Helpful guides on car loans

New cars Australia

Car Statistics Australia: Car Sales & Car Loans Report

As part of Savvy’s ongoing research into automotive consumer sentiment and broader financial landscape of Australians, we present the latest car finance statistics in Australia. Check back for new and...

Car Insurance Banner - Couple driving their vehicle on a short-term holiday with the sunset in the background.

Do I Need a Deposit for a Car Loan?

A car loan deposit is a lump sum contribution made towards the purchase of your vehicle, in conjunction with a loan from your car financier. While you don’t always need...

Car Loans Banner - Couple happily smiling and holding car keys after buying a new car

How to Avoid Paying Stamp Duty on a Car

Stamp duty is a crucial part of purchasing a car in Australia, but did you know there are certain situations where you may not have to pay it? You can...