A novated lease is getting more attention because it can make car costs feel simpler and lighter on your budget. If you have heard about novated leasing, salary packaging, and a lease agreement but still feel unsure, this guide breaks it down in plain English so you can see who qualifies, what it costs, and where Leaselab fits.

In simple terms, a novated lease is a car finance arrangement linked to your job. You choose the car, sign a lease agreement, and your employer makes lease payments from your pay using salary sacrifice.

That setup can create employee benefits through tax savings, fixed payments and easier budgeting. In Australia, it can also reduce the upfront sting of buying a car outright, especially when running costs are packaged in.

There are three sides to the deal. You, as the employee, choose the vehicle and use it for work or personal use. The leasing company or finance provider owns the car during the lease term.

Your employer agrees to the lease agreement and handles payroll deductions. That is the “novation” part. Instead of you paying the finance provider directly from after-tax pay, the employer makes the payments on your behalf.

From the start of the lease to the end of your lease, each party has a clear role. A lease company funds the car, the employer processes payments, and you drive, fuel, service and look after the vehicle in your name.

Salary sacrifice works by taking novated lease payments from your pay before income tax is applied.

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