Novated Leases

Is a novated lease the best solution for me?

What is a Novated Lease?

A Novated car lease is considered the last decent ATO-approved tax break, and it is available for all employer-approved PAYG employees, regardless if they use their vehicle for private or business use. 

A novated lease is best explained as a form of finance that has a three-way agreement between an employer, employee, and a novated lease provider.

It allows an employee to finance a vehicle as part of their salary — known as salary packaging — and benefits both the employee and employer, even where the vehicle is entirely for personal use.

Your employer makes payments to the novated lease provider from your pre-tax salary*, meaning that you can literally save thousands of dollars in income tax.

With a novated lease, you can include all the running costs of the car as well as purchasing a car without having to pay the GST. 

There are many variables to calculate when considering a novated lease. To the uneducated eye, it can be very confusing and if it is not structured correctly, can end up costing you a lot of money unnecessarily!

Bundle all your costs, save tax, and never be out of pocket


Lease payments




Comprehensive insurance

Benefits of Novated Lease with NSP

  • We have 35 years of comparing finance solutions to find the right fit for our clients
  • No GST payable on the car
  • No GST payable on running costs
  • GST can be claimed by the employer as a tax credit
  • Reduce payroll tax for employers
  • No obligation on the part of the employer to either the vehicle or the lease, A cost-effective way of acquiring a vehicle
  • Employee income tax savings
  • Fully maintained personal vehicle — including fuel, insurance, servicing, repairs, roadside assist and registration
  • 100% personal use of the vehicle
  • Option to de-novate and re-novate if changing employers
  • FREE independent vehicle & finance advice
  • We pass on our bulk discount to you – This means you will also get a discount off the regular car price and can save more money on your vehicle purchase.

Brochure – Business Use

Pay off your mortgage faster using the novated lease savings
Pay off your mortgage faster using the novated lease savings

How much tax have some of our clients have saved?

I saved $40,665 over 5 years
Jarrod Callanan
Sales Manager, Stonehaus
I saved $13,119 over 1 year
nsp plane
Pilot, Virgin Airlines
I saved $27,315 over 5 years
Alastair Read
Commercial Manager, Dunlop Flooring
I saved $32,797 over 5 years
Ben Andrews
Urban Kitchen Joinery

Frequently asked questions

Ask your new employer if they allow salary packaging and if so, contact NSP and we’ll arrange payroll deductions with your new employer. 

The novated lease agreement will end with your current employer, but the finance lease between you and your finance company can remain intact. You just keep making the lease payments – but of course, this means you can’t package any of the repayments or gain any tax benefits. If you wish to finalise your lease contract early, you have to contact the finance company to talk about finalising any amount owing on the vehicle.

You can pay out your lease early, but you need to check your pay-out figure to see if the remaining balance is in line with the market value of your car. We would recommend getting to the 75% point of your lease before breaking it early.

When your lease comes to its end you can purchase the vehicle, and you’ll need to pay out any residual value, arrears or overdue interest. Or, if you wish to purchase the car, you can refinance it for a new term. Another option is to replace the car with another, and take out a new agreement.

This is the amount left owing on the vehicle at the end of the lease term. This is a fixed amount that is set by the ATO at the start of the lease. Residuals help to keep monthly repayments down.

Yes, as long as the car is no older than 8 years of age at the end of the lease.

What do we mean when we say ‘days unavailable’?

A car is treated as available for use whilst it is under your custody and control, regardless of whether you or your associates use it. If you relinquish control of the car, the number of days usage can be reduced and thus save on FBT cost. If the car has been leased for part of the FBT year, only count the days within the lease term and not available. For example, if a lease start date is 1 July 2020, only count the days not available for private use from 1 July 2020 to 31 March 2021.

A car is only deemed not available in either of the following scenarios:

  1. The car is garaged at the employer’s premises or;
  2. The car can be classified not available if all of the following conditions are met:
  • The car is kept in safe storage away from your residence;
  • You and your associates do not have custody or control of the car (keys are surrendered to employer);
  • You and your associates are prohibited by the employer from using the car for private purposes; and
  • The car is unavailable for the whole day (midnight to midnight).

Please note that one day is considered 12am to 11:59pm. So for example, if you relinquish custody of your car at 5pm on the 5th of March and assume control again at 8am on the 7th of March, only one day is considered unavailable. 

When does days unavailable apply?

If your vehicle is a Tool of Trade or Pool Vehicle, which is never available for private use, then you are not required to submit an FBT Declaration. All other leases with any portion of private use are required to submit a declaration, where the vehicle has been unavailable for private use for a full 24 hour period midnight to midnight.


  • Control of the car is transferred to the employer by surrendering car keys or providing substantiation and;
  • The car is parked at the employer’s premises and;
  • The employer has placed a prohibition on private use of the car and consistently enforces that, perhaps by having a staff policy for car use.
  • A car is in for major repairs over two nights. This includes a single 24 hour period midnight to midnight, constituting 1 day unavailable.
  • Due to an overseas holiday where the car is left at the employer’s premises for 10 days (excluding drop off and pick up days) and keys are surrendered to the employer.
  • Due to a collision where the car is not driveable or roadworthy and is in the workshop for body and mechanical repairs for 14 days (excluding drop off and pick up days), and the repairer will provide documentary evidence (such as an invoice).
  • A car is in for routine servicing, but due to a delay in parts availability remains in the workshop for one afternoon, one full day and one morning. Documentary evidence is required for this 1 day unavailable.

When does days unavailable NOT apply?

The vehicle is available for private use which includes:

  • Travel between home and work
  • Parked near your residence
  • Garaged at or near your residence
  • You or your associates have effective control of the car (keys)


  • Car is in a workshop for routine servicing or maintenance not involving a full 24 hour holding period
  • Car is available whilst you are away from work on holidays
  • Car is available whilst you recover from work related injury
  • Being ill for several days and remaining at home whilst the car is still available for use by you or your associates
  • Parked at an airport when you are travelling for business (unless the employer takes control of the keys at the airport).