Novated Lease.
Drive the Hyundai of your dreams while making potential tax savings along the way.
Kona Electric Premium variant shown.
Join 350,000 Australians with a novated lease.
A novated lease isn’t just for big corporates - more and more people are discovering the potential benefits of a novated lease. Especially when it comes to getting into our most popular EVs.
How does it work?
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. Ordinarily, 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.
Potential other benefits include:
Electric Car (EV) Discount
Comparison table.
| Car Loan1 | Novated Lease2 | |
|---|---|---|
| Vehicle driveaway price3 | $57,990 | $57,990 |
| Upfront GST payable on vehicle price | $0 | $5,034 |
| Weekly finance repayment (car loan) or lease payment (novated leasing) including interest4 and fees5 | $385.28 | $349 |
| Estimated savings per week | $0 | $128 |
| Net cost per week6 | $385.28 | $217 |
| Estimate of total difference over 5 years7 | $100,172.80 | $72,790.80 |
FAQs
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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 the big-ticket items such as registration, insurance and servicing. You’ve got these big expenses pre-budgeted for, while potentially benefiting from reducing your taxable income. Owning a vehicle outright or using a traditional car loan means your payments and/or running costs are all made with post-tax dollars.
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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:
- Fully electric or a plug-in hybrid*
- Priced under the Luxury Car Tax threshold
- A new car
- First held and used on or after 1 July 2022
*Plug-in hybrids will no longer be able to access the Electric Car Discount from 31 March 2025 onwards.
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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. Click here for more details.
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Oly is an Australian-owned and operated novated leasing lease provider, making novated leasing a finance option that is easy to understand and accessible to millions more people. The Oly team will work closely with you and your employer to create a novated leasing solution that could benefit everyone. Backed by one of Australia’s biggest and most trusted workplace benefits providers McMillan Shakespeare Group (MMS), Oly are experts in the world of novated leasing. Clickhere to find more about Oly.
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Yes, you can claim electricity for charging an EV – both at home via a smart meter 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 a home charging station cannot be claimed under a novated lease agreement.
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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.
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There are four options at the end of your lease:
- Take out a new lease on a new car.
- Extend your current lease on your current car.
- Buy your current car outright by paying the residual value.
For more details, visit the Oly website.
Disclaimers.
[1] All calculations in relation to the car loan are based on the following assumptions: living in NSW, loan amount is the full price of the car: $57,990, salary: $90,000 gross p.a., travelling 15,000 kms p.a., loan term of 60 months and an interest rate of 8.9%.
[2] All calculations in relation to the Novated Lease are based on the following assumptions: living in NSW, salary: $90,000 gross p.a., travelling 15,000 kms p.a., finance/lease term of 60 months and an interest rate of 12% .
[3]Pricing based on the drive-away cost of a vehicle based in NSW.
[4] Interest rate used for novated lease is 12% . Interest rate use for car loan is 8.9%.
[5] The novated lease finance cost includes an administration fee of $220 inc GST p/a and the fee charged by the finance provider of $0, which has been used for illustrative purposes only. The actual administration fee applicable to your novated lease may differ as it will be dependent on your employer’s salary packaging plan.
The differences above are indicative and of a general nature only, and we have not taken your personal financial objectives, situation or needs into account. We recommend you seek professional financial and taxation advice before making any financial decisions regarding a novated lease
[7] Residual value, also referred to as a “balloon payment”, is the payment required by the Australian Taxation Office at the end of a novated lease term. The residual cost is calculated at 28.13% for novated lease as per ATO guidelines. No residual cost is payable at the end of a car loan.