Novated leasing, explained without the jargon.
A novated lease is a way to pay for a car through your salary, with the running costs bundled in. Your employer, you, the finance provider and us all play a part. The mechanics are simple once they're explained properly. The page below does that.
The short version
A four-way arrangement, with the running costs included.
A novated lease is an agreement between four parties: you, your employer, the finance provider and Streetfleet. Your employer takes a portion of your pay (before and after tax) and uses it to cover the cost of the car and most of its running costs: finance, fuel, servicing, registration, comprehensive insurance, all of it. You drive the car the way you'd drive any other car. The structure changes how the cost flows through your pay; the calculator gives you an indicative figure for what that looks like.
The four parties
Who does what in a novated lease.
You
Pick the car. Drive it. Use the Digital Drivers Guide on your windscreen to access everything from your phone. Talk to your consultant whenever you need to.
Your employer
Approves the salary-packaging arrangement and pays your regular deduction (weekly, fortnightly or monthly) to the financier through payroll. They don't own the car. They don't carry the lease. The lease is in your name.
The finance provider
Funds the car. The lease sits with the financier under a novation agreement that allows your employer make the payments on your behalf.
StreetFleet
Sources the car at national fleet pricing, sets up the structure, manages the running costs and the budget, and stays your point of contact for the life of the lease.
How the structure changes the cost.
Two things change when you package a car through your salary.
- 1. Salary packaging. Most of your lease payment comes out of your pay before income tax is calculated. Where a post-tax FBT contribution applies, that comes out after tax. The mix changes how much tax you pay, but the result depends on your situation.
- GST on eligible new cars. For eligible new cars within the luxury car tax threshold, there is no GST on the purchase, so you get even more potential savings. Used cars don't qualify, and new cars priced above the threshold don't either.
Who can do a novated lease.
Most Australian employees can do a novated lease, as long as their employer agrees to set up the salary-packaging arrangement (which is usually a "yes": there's no cost or risk to them).
You're a likely fit if:
- You're a salaried employee with an Australian employer
- Your employer offers salary packaging or is willing to set it up
- You've got a car you want to lease (new, used, or even one you already own)
You might not be a fit if:
- You're self-employed or contracting (no employer to novate with)
- You're under specific government EBAs that don't allow novated leasing. Talk to your HR or payroll team to check.
- You're between jobs or about to leave. The lease has to be portable or settled if you change employers.
Common misconceptions
What you might have heard that isn't quite right.
Where to next?
Now that you've got the basics.
Want it explained over the phone?
A five-minute call with one of our novated consultants is often faster than reading the rest of the website. They can walk through the structure for your salary and the car you're considering, with no commitment to proceed.