Is a Tesla Model Y eligible for novated leasing?

Yes, the Tesla Model Y is eligible for novated leasing. As an electric vehicle it can also be exempt from FBT, as long as no luxury car tax has been paid on the car, although the benefit still counts towards your reportable fringe benefits amount. You'll need to check with your novated lease provider to make sure they offer the Tesla Model Y, but it should be a standard offering.

What happens at the end of a Tesla Model Y novated lease?

Once your novated lease term has finished you have a couple of options. One option is to pay the residual value of the car so that you now own the car. Once you've paid for the car and you own it, you can then decide whether to keep the car or sell it. Another option is that you can start a new lease with a new car. This can still work out as a cost-effective option because you'll be making the tax savings.

Can I include running costs for a Tesla Model Y in my novated lease?

You can choose between a non-maintained novated lease or a fully maintained novated lease. The fully maintained novated lease includes costs like car registration, insurance and maintenance. For electric vehicles like a Tesla Model Y, it can also include charging costs. This is a cost-effective way to pay for running costs because it'll also come from your pre-tax salary and so you'll save money compared to paying for those costs from your post-tax income.

Tesla Model Y novated lease

A novated lease is a salary sacrifice arrangement where car lease repayments come directly from your pre-tax salary.
The Tesla Model Y is an electric vehicle available for novated lease and as an electric vehicle it comes with additional tax benefits.
Depending on the terms of your novated lease, it can be much more cost-effective than taking out a car loan.

What is a novated lease?

A novated lease is an agreement between an employee, their employer and a third party leasing company.

The employer arranges a car lease from the third party company. The employer then takes out the lease repayments from the employee's pre-tax salary.

This means the employee receives less take-home salary, but it actually saves them money compared to if they were to make car repayments from their post-tax salary.

Why choose a novated lease for the Tesla Model Y?

For anyone considering an electric vehicle, Tesla is often the first make that springs to mind. And the Tesla Model Y is the highest-selling Tesla in Australia.

Although buying a new car, particularly an electric vehicle, is a significant cost, novated leasing makes this a more achievable purchase.

Not only does novated leasing save the employee money, with an electric vehicle there are other tax benefits too, like reduced income tax, an FBT exemption (as long as no luxury car tax has been paid on the car) and a higher luxury car tax threshold.

So if you're looking to buy a Tesla Model Y, this might be the solution.

Tesla Model Y novated lease cost vs buying outright

By sacrificing the novated lease repayments out of the employee's pre-tax salary, it reduces the taxable income of the employee. In doing this, it can
cost much less to buy a car this way.

Let's take a look at an illustrative example. The car price, lease, tax and loan figures below are from October 2025 and aren't a quote, so check current Tesla pricing and use a novated lease calculator for your own numbers:

Fully maintained novated lease

You're on an annual salary of $100,000, which is a monthly pre-tax income of $8,333.33.
You choose a Tesla Model Y priced at $58,900 on a 5 year fully maintained novated lease.
Your monthly lease repayments are $1,180.83 a month, which comes out of your pre-tax salary and includes costs like insurance, registration and 1 set of tyres.
Your taxable income is reduced to $7,152.50, which means your take-home pay falls to $5,627.50 a month from $6,431.33.
This means your $1,180.83 lease repayment only reduces your net income by $803.83.
At the end of the lease you can pay a residual value of $18,472 to own the car.

Buying a Tesla Model Y through a car loan

You borrow $58,900 through a 5 year car loan with a personalised interest rate of 9%.
Your monthly repayments, assuming no loan fees, will be $1,223.
This comes out of your post-tax salary, meaning you only have $5,208.33 left.
The total cost to you for the loan would be $73,361.
You still need to pay separately for insurance, registration and any repairs or maintenance which would cost thousands more each year.

Who benefits most from a Tesla Model Y novated lease?

A Tesla Model Y novated lease is best for employees with a full-time, permanent and stable job. Casual employees can't take advantage of a novated lease.

It's ideally for mid-to-high income earners who can afford the consistent repayments and lower take-home salary. You can use a novated lease calculator to make sure you can afford the repayments.

A novated lease also works best for people who are happy to put all of their fuel and maintenance costs into their novated lease (a fully maintained lease) for even more savings.

Salary sacrifice and tax treatment (ATO context)

Novated lease repayments will come out of the employee's pre-tax salary. This means there's nothing the employee needs to do, the repayments are effectively managed by the employer.

As well as being a logistical benefit, salary sacrificing reduces the employee's taxable income. The biggest benefit of this is that the employee loses less of their take-home income than if they were to make the payments post-tax.

Pros and cons of a Tesla Model Y novated lease

Pros:

As an electric vehicle, the Tesla Model Y can be exempt from Fringe Benefits Tax (FBT), a cost often passed on to the employee, as long as no luxury car tax has been paid on the car. The exempt benefit still counts towards your reportable fringe benefits amount.
You can lower your taxable income and with a fully maintained novated lease that saves you even more.
It's a cost-effective and manageable way of buying an electric vehicle.
If you decide you want a different car at the end of the lease period, you can just start a new lease.

Cons:

You don't own the vehicle until you've paid the residual value at the end of the lease, so there are restrictions on being able to modify the vehicle.
If you want to own the vehicle at the end of the lease you'll need to pay a one-off residual cost which can be a large financial burden.
You might have less control over where you buy fuel, get your insurance or get your car serviced.

Alternatives to a Tesla Model Y novated lease

Standard car loan:

You can buy the car by taking out a car loan and making principal and interest repayments.

Dealer finance:

Car dealerships will often have finance options. They might offer lower monthly repayments but you'll still need to pay a residual payment at the end of the term.

Buying outright:

If you have the funds saved up you can simply buy the car in cash! It's a large chunk of money to lose in one go though, so make sure you won't end up with no emergency savings or financial buffer.

Subscription services:

If you're not worried about ever owning the car, you could opt for a car subscription instead. You can borrow a car for a minimum of 30 days and your fees will cover the cost of roadside assistance, comprehensive insurance, and service and maintenance.

FAQs about novated leasing a Tesla Model Y

Yes, the Tesla Model Y is eligible for novated leasing. As an electric vehicle it can also be exempt from FBT, as long as no luxury car tax has been paid on the car, although the benefit still counts towards your reportable fringe benefits amount.
You'll need to check with your novated lease provider to make sure they offer the Tesla Model Y, but it should be a standard offering.
Once your novated lease term has finished you have a couple of options. One option is to pay the residual value of the car so that you now own the car. Once you've paid for the car and you own it, you can then decide whether to keep the car or sell it.
Another option is that you can start a new lease with a new car. This can still work out as a cost-effective option because you'll be making the tax savings.
You can choose between a non-maintained novated lease or a fully maintained novated lease. The fully maintained novated lease includes costs like car registration, insurance and maintenance. For electric vehicles like a Tesla Model Y, it can also include charging costs.
This is a cost-effective way to pay for running costs because it'll also come from your pre-tax salary and so you'll save money compared to paying for those costs from your post-tax income.

Finder writers are subject matter experts and use primary sources, in-depth research and interviews with other experts to ensure you're getting accurate, up-to-date information. Articles are fact checked in line with our editorial guidelines.
1. Novated lease calculator, Fincar
2. Electric cars exemption, ATO

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Written by

Rebecca Pike

Editor, Money

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Rebecca Pike is Finder’s money editor, with over 7 years of experience in mortgages and personal finance. A frequent TV and radio commentator, she frequently appears on Sunrise and 7News, Today and 9News, as well as Sky News, Channel 10 and across radio and print. Rebecca previously served as Editor of Mortgage Professional Australia. She has a Master’s degree in Journalism as well as ASIC-recognised certifications in Tier 1 Generic Knowledge and Tier 2 General Advice Deposit Products, which comply with ASIC guidelines. See full bio

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Rebecca has written 253 Finder guides across topics including:

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