Electric Car Novated Lease

Switching to a zero or low emission Battery Electric Vehicle (BEV) has never been easier. Thanks to the Australian Government’s Electric Car Exemption, you can save on your next EV with a novated lease.

There is no Fringe Benefit Tax (FBT) liability on a Battery Electric Vehicle (BEV) that meets the conditions for employer FBT exemption.

Whether you're looking to reduce your tax burden, lower your running costs^[A1], or make a an impact on the environment, a novated lease with TFM is a smart way to electrify your drive.

Tax Savings

FBT Exempt Novated Lease payments are deducted from your pre-tax salary, which can lower your taxable income^[F2].

BEV benefits

Electric Cars typically have cheaper fuel and lower maintenance costs when comparing to a typical petrol/diesel vehicle.^[A1]

All-Inclusive

a TFM novated lease lets you bundle all of your vehicle expenses into the one pre-tax salary deduction.

How does it work?

Lease set up

Your employee chooses a car and a Novated Lease arrangement is set up between the employee, employer and TFM.

Payments made

An employer makes payments to TFM from the employee's salary.

Employee saves

Your employee gets the car they want, saving on tax and running costs, including car price, fuel, maintenance and tyre purchases.

Cashless motoring

Your employee enjoys the convenience of cashless motoring.

Vehicle Requirements

Ensure that your Novated Lease is eligible for the FBT exemption. Your Electric Car needs to meet the key criteria outlined by the Australian Tax Office:

Vehicle must be a Battery Electric Vehicle.
When new, the vehicle must have had its first retail sale on or after 1 July 2022 and must have been 'first held' on or after July 1st 2022.
At no point either at most recent sale or in the vehicle’s history has the vehicle ever been liable to luxury car tax LCT.
The vehicle payload must be less than one tonne. Also, the total designed seating must not exceed eight occupants

How much will I save?

If you choose an FBT Exempt BEV Novated Lease your deductions are made from your pre-tax salary.

To understand the cost of a Novated Lease you can use the TFM Novated Leasing Calculator which enables you to compare different vehicle types including an Electric Car.

The calculator also compares using cash or a personal loan to purchase a vehicle, as well as what Tax Savings you should obtain by using a TFM novated lease. You will carry a Reportable Fringe Benefit Amount (RFBA) on a leased BEV - click here for more details.

Contact a specialist

If you are looking to purchase a new or used vehicle and interested in fleet leasing options including a Novated Lease, please contact us.

Call us Enquire

Disclaimers

^[A1] Based on information published by the Australian Government at Hybrid vehicle information | Green Vehicle Guide as at February 2025.

^[F2] An employee, will carry a full reportable fringe benefit amount on the leased BEV regardless of the employer FBT exemption.

The information provided by Toyota Fleet Management (TFM), a division of Toyota Finance Australia Limited ABN 48 002 435 181, Australian Credit Licence No 392536, on this website is of a general nature and for your information only. Nothing on this TFM Website constitutes or should be considered to constitute legal, taxation or financial advice. Before making a decision about any product or service featured on this TFM Website, TFM recommends that you seek independent professional advice about that product or service, such as from your accountant, taxation or financial adviser or lawyer, who can advise you about your personal circumstances and what would be suitable for you.