Cost of missing the cutoff, by car price
Extra cost over a 5-year lease compared with committing before 1 April 2027, at a $100,000 salary, 15,000 km a year, 9% lease rate and the ATO minimum residual. Drive-away price is used as the base value.
| Car price | Total, commit before 1 Apr 2027 | Extra, commit Apr 2027 to Mar 2029 | Extra, commit from Apr 2029 |
|---|---|---|---|
| $50,000 | $57,756 | $0 | $12,000 |
| $70,000 | $76,025 | $0 | $16,800 |
| $75,000 | $81,046 | $0 | $18,000 |
| $80,000 | $86,067 | $19,200 | $19,200 |
| $90,000 | $96,109 | $21,600 | $21,600 |
The step at $75,000 is a cliff, not a slope: a car one dollar over the cap committed after 31 March 2027 moves from no FBT to post-tax contributions of 15% of its whole base value. If your car is close to the line, the base value (which excludes rego and stamp duty) is the number to check, not the drive-away price.
How the draft rules work
| Commitment made | Base value $75,000 or less | Over $75,000, up to $91,661 |
|---|---|---|
| Before 1 Apr 2027 | Exempt until the commitment ends | Exempt until the commitment ends |
| 1 Apr 2027 to 31 Mar 2029 | 100% discount: statutory rate 0% | 25% discount: statutory rate 15% |
| From 1 Apr 2029 | 25% discount: statutory rate 15% | 25% discount: statutory rate 15% |
Over $91,661 (the 2026-27 fuel-efficient LCT threshold) there is no concession at any date. Later years' thresholds aren't published yet, so the calculator uses the 2026-27 figure throughout. The background and eligibility conditions are in our EV FBT exemption guide.
With a 15% rate, novated leases normally use the Employee Contribution Method: you pay 15% of the base value each year from after-tax pay, which reduces the taxable value to nil, so your employer pays no FBT. That contribution is what makes the later scenarios dearer: it is money that would otherwise have come out before tax.
Events that end grandfathering
A lease committed before 1 April 2027 stays exempt only while that commitment continues. The draft explanatory materials (para 1.11) list these as new commitments, after which the car is priced under the rule for the new date:
- Refinancing the car.
- Altering the contract, for example the lease term or residual value.
- Adding accessories (tinting, bull bar, roof racks) if that increases the lease payments.
- Changing employer, even within the same corporate group.
- Moving to another government department, even if the car's ownership doesn't change.
A re-lease of the same car at the end of the term is also a new commitment. If you expect to change jobs within the lease, set the employer change option above to see what the remaining years cost.
What we assume
- Rules are the exposure draft as published; the final law may differ.
- "Before 1 April 2027" assumes a lease starting by March 2027; the other scenarios start 1 April 2027 and 1 April 2029. Each scenario uses today's tax rates, prices and interest rates.
- Post-tax contributions equal the statutory rate times the base value, which fully offsets FBT. Reportable fringe benefits are grossed up at the type 2 rate and only counted above the $2,000 reporting threshold.
- Lease and GST mechanics match our novated lease calculator.
Frequently asked questions
Does the date I sign or the date I get the car count?
Under the draft, the date the commitment was made: the point the lease is financially binding and can no longer be backed out of. For the existing PHEV rule the ATO also required the car to be in use before the cutoff, with no allowance for delivery delays. The EV draft does not repeat that condition, but get the timing confirmed in writing by your packaging provider if delivery will land near 1 April 2027.
Can I end my lease early and start a new one to keep the exemption?
The explanatory materials warn that ending a commitment early and immediately entering a new one just to keep the exemption, or to lock in the 100% discount before April 2029, may be caught by the general anti-avoidance rules.
Sources
Figures on this page come from the following primary sources. The date is when we last checked the page against the source.
- Sustainable fringe benefits tax treatment of electric cars: exposure draft and explanatory materials (Treasury), checked 5 October 2026.
- Treasury Laws Amendment Bill 2026: Phased changes to the FBT electric car exemption, exposure draft explanatory materials (Treasury), checked 5 October 2026.
- Electric car discount: more sustainable FBT treatment of electric cars (ATO), checked 5 October 2026.
- Electric cars exemption (ATO), checked 5 October 2026.
- Fringe benefits tax rates and thresholds (ATO), checked 25 August 2026.
- Luxury car tax rate and thresholds (ATO), checked 27 July 2026.
- Car thresholds from 1 July (ATO), checked 27 July 2026.
- ATO ID 2002/1004: minimum residual values for leased cars (ATO), checked 27 July 2026.
- Reportable fringe benefits for employees (ATO), checked 25 August 2026.
Related calculators & guides
Novated lease calculator: lease vs loan vs cash for any car. Novated lease vs car loan: worked totals and quote questions. Novated leases and HECS: how reportable fringe benefits raise repayments. PHEV novated lease calculator: plug-in hybrids after the 2025 change.
Figures current as at 5 October 2026; draft rules last checked 5 October 2026. See our methodology. General information only, not financial advice.