In today’s competitive job market, top candidates are looking for more than just a competitive salary — they want meaningful, flexible benefits that make a real difference in their lives. One benefit that’s gaining traction among progressive Australian employers is novated leasing.

Offering novated leasing as part of your employee benefits package can help you stand out to potential hires while providing existing team members with a tax-effective way to drive the car they want.

What Is Novated Leasing?

Novated leasing is a three-way agreement between the employee, employer, and a finance provider that allows employees to lease a car using their pre-tax income. It’s a form of salary packaging that can offer significant tax and cost savings — particularly for electric vehicles (EVs), which may be exempt from fringe benefits tax (FBT) under current rules.

Why Novated Leasing Appeals to Employees

• Tax Savings – Employees can reduce their taxable income by packaging car lease repayments and running costs through their salary.
  
  
• Simplicity and Convenience – All car-related expenses (fuel, maintenance, insurance, rego, tyres, EV charging) are bundled into one regular deduction — making budgeting easier.
  
  
• Access to a Better Vehicle – With pre-tax dollars at work, employees may afford a higher-spec model than they could otherwise, including EVs and hybrid cars.
  
  
• Sustainability Appeal – Novated leasing encourages EV uptake, aligning with the values of environmentally conscious employees.
  
  
• Benefits for Employers – While novated leasing is an employee-driven benefit, the rewards for employers are substantial too.
  
  
• Attract Top Talent – Offering novated leasing signals that your organisation supports financial wellbeing and flexibility — a key differentiator in today’s recruitment landscape.
  
  
• Boost Retention – Employees with novated leases are less likely to leave mid-lease, providing a natural retention incentive.
  
  
• No Direct Cost – There’s no need for the employer to own or finance the vehicle. You simply facilitate the salary deductions through payroll.
  
  
• Enhance Your EVP – A strong Employee Value Proposition (EVP) includes benefits that go beyond the basics. Novated leasing strengthens your offering without increasing fixed wage costs.