Novated Lease Electric Car

Currently yes, EVs are more expensive than typical I.C.E. vehicles. However, as long as the cost of the vehicle is under the luxury car tax limit, you can salary package your vehicle deal.

With a Novated Lease, the amount you save on an EV through FBT exemption increases dramatically, and the overall costs drop significantly.

Try our EV novated lease calculator here. At S.P.A., we proudly provide novated lease for electric car options, as well as novated leases on petrol/diesel cars.

Absolutely not. If anything they’re much more economical.

• To drive a petrol car 100kms, would cost approximately $20.81 where fuel is $2 a litre.
• To drive a diesel car 100kms, would cost approximately $9.37 where fuel is $2 a litre.
• To drive an EV 100kms, would cost approximately $4.50 of electricity (peak vs offpeak costs vary), and if you have solar installed at home you’ll save even more!

EV’s are also much cheaper to service, and require much less frequent servicing as there’s nowhere near as many moving parts susceptible to breaking, and general wear and tear. An EV car lease with S.P.A. makes it more affordable than ever.

According to the Electric Vehicle Council, modern electric vehicles (EVs) now boast an average battery range of nearly 480 km on a single charge, making them highly suitable for most daily commuting and travel needs. With rapid advancements in battery technology, newer EV models are achieving even greater efficiency, with some now offering ranges of up to 550 km or more per charge. These improvements enhance convenience for drivers while addressing concerns about range anxiety, further solidifying EVs as a practical and eco-friendly alternative to traditional petrol-powered vehicles.

The amount you save depends on several factors, including your annual income, the cost of the electric vehicle you choose, and its running costs based on your km’s travelled. Here’s how it works:

• Tax Savings: Salary packaging an EV lets you pay for all running costs—lease payments, servicing, insurance, registration, tyres, and electricity—using your pre-tax income. This reduces your taxable income, meaning you pay less tax and keep more of your earnings. Unlike owning a petrol vehicle, where expenses come from your after-tax salary, this setup makes running an EV significantly cheaper. With the combined tax savings and lower running costs of an EV, you could save thousands of dollars every year.
• Fringe Benefits Tax (FBT) Exemption: The FBT exemption on eligible EVs, introduced by the Electric Car Discount Bill, further enhances these savings by eliminating the need to pay part pre-tax and post-tax on the vehicle, which was traditionally a significant cost for salary-packaged cars.
• GST Exemption: Under a novated lease, you typically don’t pay GST on the purchase price of the vehicle or its running costs, adding another layer of financial benefit.

For example, a mid-range EV like the Kia EV6 Air leased over four years could save you a significant amount when compared to purchasing the vehicle outright, thanks to lower taxes and bundled running costs.

Your exact savings will depend on your salary, lease structure and running expenses. At S.P.A., we can give you a detailed breakdown of the savings, according to your circumstances.

While it’s been a slower start to getting charging stations available all around the country, they are popping up everywhere.

In fact, go ahead and take a look at how many are in your area. Find your nearest public charging station here.

As battery technology continues to improve, so does the average range a new EV can travel on a single charge. You can easily find new EV’s that can travel up to 500kms. That is more than enough, considering most Australians live in metropolitan areas and travel an average of 30-40 kms in their daily journeys.

All electric vehicles must meet the same Australian car safety standards as other vehicles. Also, as the battery is located near to the ground, the car’s centre of gravity is much lower, providing much better handling. You’re also not carrying around a tank full of petrol.

There are a few points to consider about EV’s and their green status:

• EV’s don’t create exhaust pipe emissions, so they don’t cause fine particulate pollution or expel carbon dioxide/monoxide etc. This reduces air pollution and improves the air quality for pedestrians and cyclists.
• While they use electricity (mostly created by coal burning power stations) to be recharged, greener power sources are becoming more abundant. Research by the European Energy Agency found that, even with electricity generation, the carbon emissions of an electric car are around 17 – 30% lower than driving a petrol or diesel car.
• The batteries in an EV are fully recyclable. As technology advances, the lifetime and efficiencies of EV batteries will improve even further.

The Fringe Benefits Tax (FBT) exemption for eligible EVs allows you to enjoy financial savings by leasing your vehicle through a novated lease arrangement.

When you lease an EV, the total running costs – including lease payments, servicing, insurance, registration, tyres, and electricity – are bundled together and deducted from your pre-tax salary. This lowers your taxable income, which reduces the amount of income tax you pay.

One of the standout benefits is that you don’t need to maintain a logbook or track your personal versus business use of the vehicle. The FBT exemption simplifies the process, applying across all eligible EVs, as long as they meet the required criteria (such as being below the luxury car tax threshold for fuel-efficient vehicles).

By eliminating FBT, the government has made it easier and more affordable to switch to sustainable transport options while allowing you to save money on your vehicle’s total costs.

There are different benefits available with a novated lease for EV, Australia-wide.

Queensland’s EV policies include:

• a $10 million co-fund to support public charging infrastructure, in partnership with local government and industry
• annual discount on vehicle registration
• reduced stamp duty for EVs and hybrid vehicles.

The Northern Territory Government has developed an EV strategy and implementation plan, which includes a range of actions over the next 5 years.

From 1 July 2022 to 30 June 2027, the NT Government will waive:

• stamp duty fees for the sale of plug-in EVs up to $50,000 – providing a saving of up to $1,500
• the registration fee when you register an EV – providing an annual $91 saving.

From 1 July 2022, the Electric Vehicle Charger (Residential and Business) Grants Scheme will be available to owners of EVs to buy and install EV chargers, with a total of $300,000 being committed. This includes 100 residential grants of $1,000 and 80 business grants of $2,500.

Eligibility to salary package an EV depends on your employer and their salary packaging offerings. Most organisations that provide salary packaging allow employees to include novated leases as part of the arrangement. To determine your eligibility:

• Check with Your Employer: Confirm that your employer supports novated leasing and offers salary packaging for vehicles. Employers in both the public and private sectors often provide these benefits.
• Employment Type: Salary packaging is typically available to full-time and part-time employees. Some casual employees may also be eligible, but this depends on the employer’s policies.
• Employer’s Arrangement with Providers: Employers often partner with salary packaging providers or novated leasing companies, such as Salary Packaging Australia. These providers manage the administrative aspects of the lease, so it’s important to confirm if your employer works with one.
• Income Thresholds: While there’s no formal income threshold to salary package an EV, higher-income earners tend to see more significant tax benefits due to their higher marginal tax rates.

If your employer offers this benefit, it’s a straightforward process to set up a novated lease with S.P.A. and start enjoying the tax savings and cost efficiencies of salary packaging an electric vehicle. If your employer doesn’t offer Novated leasing, get them to contact us on 1300 786 664 to find out how.

You have a few options depending on the situation. Here’s how each scenario works:

If You Leave Your Job:

A novated lease is a benefit offered by your employer and tied to your employment, so leaving your job may require adjustments:

• Transfer the Lease: If you start a new job with another employer who supports novated leasing, you can transfer your lease arrangement to your new employer, maintaining the tax benefits.
• Take Over the Lease Payments: If your new employer doesn’t offer salary packaging or you’re taking a break from employment, you may continue making the lease payments directly to the leasing company. However, you’ll lose the associated tax savings since the payments will no longer come from your pre-tax salary.
• Terminate the Lease: If neither option works, you might choose to terminate the lease early. Be aware that this may incur penalties, such as early termination fees, depending on the leasing agreement.

At the End of the Lease Term:
When your lease reaches its conclusion, you typically have several options:

• Purchase the Vehicle: You can buy the vehicle outright by paying the residual value (a pre-agreed amount specified at the beginning of your lease contract). This option is popular for drivers who want to keep the vehicle long-term.
• Start a New Lease: If you prefer to drive a newer model, you can finalise your current vehicle lease and enter into a new novated lease for another car.
• Return and Re-Lease: If you are happy with your current vehicle, in most cases you will have the option to re-lease the same vehicle again.

It’s important to review the terms of your novated lease and consult with us at Salary Packaging Australia to understand your specific options. We pride ourselves on providing a transparent and accurate service you can trust.

Planning ahead can help you avoid unexpected costs and ensure a smooth transition, whether you’re changing employers or deciding what to do at the end of your lease.