Australia · 2026-27 · checked 18 October 2026
Yes. A novated lease changes the income Services Australia uses for child care subsidy, Family Tax Benefit and child support, and the change can go up or down. An electric car with no fringe benefits tax doesn't switch it off.
Put in your pay, the lease and your household. You get what the lease does to your tax, your family payments and your child support, and what the car costs after all of it.
What you enter stays in your browser. These are estimates, not an assessment: your lease provider's quote has the real lease figures, and Services Australia decides what you are paid.
Tax is only part of it: family payments and child support move too. See what my family keeps ↓
A novated lease takes money from your pay before tax, so your taxable income falls. But the car also shows on your income statement as a reportable fringe benefit, and Services Australia adds that amount back. Which effect is bigger decides whether your payments go up or down.
For one family on $100,000 with two young children, an electric lease cut Family Tax Benefit by $528 a year. A petrol lease on the same pay raised it by $905.
Fringe benefits tax is paid by your employer, not by you. But the grossed-up value of the benefits you receive goes on your income statement as your reportable fringe benefits amount. You aren't taxed on it. The ATO says it is used to work out your Medicare levy surcharge, your HELP repayments, your eligibility for family assistance payments including Family Tax Benefit and child care subsidy, and your child support obligations.
An eligible electric car is exempt from fringe benefits tax. The ATO is clear that it is still reportable: the employer works out the car's value and reports it if it is over the reporting threshold. That is why "no tax on the car" and "no effect on my payments" are different things.
An employee on a taxable income of $100,000. The partner has no income. Two children, born 10 March 2020 and 2 May 2023. The car is $35,000 drive-away on a five-year lease at 8.5%, with the ATO's minimum residual for five years, 28.13%. We ran the lease calculator on 18 October 2026 and changed one thing at a time. The figures are a year, to start with. A plus sign is the family better off; a minus sign is worse off.
| The lease | Tax and Medicare levy | Family Tax Benefit | Child support | Together |
|---|---|---|---|---|
| Electric car, an ordinary employer | +$3,206 | −$528 | none | +$2,678 |
| Petrol car, an ordinary employer | +$1,448 | +$905 | none | +$2,354 |
| Electric car, a hospital or charity employer | +$3,206 | +$662 | none | +$3,868 |
| Electric car, an ordinary employer, a single parent who pays child support | +$3,206 | $0 | −$424 | +$2,782 |
Each figure is rounded to the dollar, so a total can differ from the sum of its parts by $1. The petrol car is run at 7.5 litres per 100 km and $2.00 a litre. In the last row the two children are with the parent 14% of nights, the other parent earns $60,000, and there is no partner.
| Taxable income before the lease | $100,000 |
| Less the package taken from pay before tax | −$10,018 |
| Plus the car's reportable fringe benefits | +$12,656 |
| Income for Family Tax Benefit: $2,638 higher than before the lease | $102,638 |
| Part A falls 20 cents for each dollar at this income: $2,638 × 20% | −$528 |
| Tax and Medicare levy saved: $10,018 × 32% | +$3,206 |
| Together | +$2,678 |
The other rows follow the same steps:
Back to the first row. Over five years the Family Tax Benefit line adds $2,487 to the cost of the lease, and the interest on that money adds more. With it counted, the lease's five-year cost on this car is $48,411. With tax alone counted, it is $45,631. The novated lease calculator page sets that against a loan and cash, line by line.
Each of our calculators answers one question. The Net Income Modeller works out tax, Family Tax Benefit, child care subsidy, child support, Rent Assistance and Parenting Payment together, so you can see what an extra day's work, a pay rise or a salary package leaves your family.
Yes. Services Australia works out the subsidy from adjusted taxable income, and that includes the reportable fringe benefits on your income statement. A novated lease takes money from your pay before tax, which lowers taxable income. The car then shows as a reportable fringe benefit, which adds income back. The ATO's example adds $8,490 of reportable fringe benefits to a $100,000 taxable income, so the subsidy is worked out on $108,490.
Yes, and it can go either way. In our run, a family on $100,000 with two young children lost $528 a year of Family Tax Benefit with an electric lease, and gained $905 a year with a petrol lease. The electric car adds more reportable income than the pre-tax package takes off. The petrol car reports nothing, and the part taken before tax lowers income.
Yes. Child support is assessed on adjusted taxable income, and reportable fringe benefits count in full. In our run, a single parent who pays child support paid $424 a year more with an electric lease. Services Australia uses the last relevant income year, so the change shows in a later assessment.
Yes. An eligible electric car is exempt from fringe benefits tax, but the benefit is still reportable. The ATO says so on its electric cars exemption page. Reportable means it is on your income statement and Services Australia adds it to your income.
Employees of public benevolent institutions, health promotion charities, public or not-for-profit hospitals and public ambulance services have 53% of their reportable fringe benefits counted for family assistance payments. The full amount is used for other things, including child support. In our run, the same electric lease raised the family's Family Tax Benefit by $662 a year, instead of lowering it by $528.
It can. A lease lowers your taxable income, and if the car adds little or nothing back as reportable income, your adjusted taxable income falls and payments that fall as income rises go up. A petrol car avoids fringe benefits tax by paying part of the cost from after-tax pay, and reports nothing. A hospital or charity employee has only 53% counted. In our run both raised Family Tax Benefit.
Services Australia says you need to tell it the gross amount of all reportable fringe benefits you get from your employer. The amount is on your income statement after the end of the financial year, and you can ask your employer for the expected amount for this year. If you don't include it in your income estimate, payments can be balanced later and you can owe money back.
ATO and Services Australia pages read on 18 October 2026, with the date each page says it was last updated.
For brokers: Put the lease calculator on your own website, in your colours, so a client sees what a lease does to their family payments before they sign. See how brokers use these calculators →
General information about novated leases and family payments for 2026-27 as at 18 October 2026, not personal advice, tax advice or an assessment. Services Australia decides what you are paid and the Child Support Registrar decides child support. Confirm your own situation with them and with your lease provider.