How does the discount for eligible EVs compare to taking out a standard novated lease for savings?

Taking out a novated lease on an eligible electric vehicle differs from a fuel-powered vehicle because there is no post-tax component to deductions. This could save employees thousands – potentially making eligible EVs more affordable to own and operate!

Let’s take an employee who earns $90,000 per year. They are tossing up between leasing a BYD ATTO worth around $50,000 and a Mazda CX3 worth around $30,000.

With the Mazda lease, they could save $14,200 in tax over the lifetime of a 5-year lease. But through the Electric Car Discount, the potential tax savings would be greater by leasing the BYD. A 5-year lease on a BYD ATTO could save this employee $34,400 in tax.

Best of all? Both cars would cost around $190 per week, even though they have different driveaway prices. This is also thanks to the Electric Car Discount.

*Assumptions: The example assumes you earn $90,000 a year, a 5-year lease term, an annual distance travelled of 15,000kms and a 28.13% residual value. Calculations are based on the assumption that you would have paid for the lease from your post-tax salary (as opposed to salary packaging those payments from your pre-tax salary or a combination of your pre and post-tax salary). Included are car payments and estimated annual operating costs (GST exclusive) of fuel, maintenance, tyres, registration and comprehensive insurance. An average administration fee and the return of associated Input Tax Credits (ITCs) is also included in the example. The actual return of ITCs and per annum administration fee that applies to you may vary depending on your employer and may alter the calculation. GST of 1/11th is payable on your Employee Contribution Method (ECM) contributions. State Stamp Duty rates apply. PAYG tax rates effective 1 July 2024 have been used. The estimated annual benefit will vary depending upon salary, employment circumstances, selected benefits and applicable tax treatment.

Things you need to know: This general information doesn’t take your personal circumstances into account. Please consider whether this information is right for you before making a decision and seek professional independent tax or financial advice. Conditions and fees apply, along with credit assessment criteria for lease and loan products. The availability of benefits is subject to your employer’s approval. RemServ may pay or receive commissions in connection with its services. RemServ does not act as your agent or representative (or provide you with any advice or recommendations) in respect of the purchase of any vehicle.