- Common budgets include registration, insurance, servicing, tyres, fuel or electricity and administration fees.
- The running-cost allowance is an estimate, not free money or a fixed saving.
- Actual expenses are reconciled against contributions, so deductions may need adjustment.
- EV charging records and the provider's claim method should be understood before the lease begins.
The finance payment is only one part
A fully maintained novated lease packages regular finance repayments with forecast costs of operating the vehicle. The provider receives salary deductions, pays or reimburses eligible expenses and tracks the balance in a vehicle account.
Each employer and provider can have different rules. Confirm which expenses are accepted, how claims are made, which merchant cards or apps are used and what happens when the budget is changed.
Typical budget items
| Cost | How it is commonly estimated | What can change |
|---|---|---|
| Registration and CTP | Current annual renewal plus expected increases | State, vehicle weight and renewal timing |
| Insurance | Actual comprehensive premium where available | Driver, address, vehicle, excess and claims history |
| Servicing | Manufacturer schedule over the term | Service intervals, dealer pricing and repairs |
| Tyres | Expected replacement cycles | Wheel size, kilometres and driving conditions |
| Fuel or charging | Annual km multiplied by realistic energy use and price | Driving, tariff, fuel price and charging mix |
| Management fees | Provider's quoted recurring charge | Employer agreement and selected service level |
What happens if the budget is too high?
A surplus can build when actual costs are lower than forecast. It is still linked to the salary-packaging arrangement and is not usually an unrestricted savings account. The provider's process determines whether deductions are reduced, the balance is used for future eligible costs, or an amount is returned through payroll with appropriate tax treatment.
What happens if it is too low?
A shortfall means contributions have not kept pace with actual claims or upcoming bills. The provider may increase future deductions or require additional funds. Review the budget after insurance renewal, a change in kilometres, unusually high fuel use or an unexpected tyre replacement.
Insurance can vary by thousands of dollars between drivers and EV models. Replacing the generic allowance with a real annual premium makes the quote more useful and reduces the chance of a shortfall.
EV home charging
Charging at home can be reimbursed using actual electricity costs where adequate records are available. The ATO also provides a practical compliance method using an EV home charging rate when its conditions are met. The ATO lists a revised rate of 5.47 cents per kilometre for the FBT year beginning 1 April 2026; previous FBT years used 4.20 cents.
The method is not automatically suitable for every arrangement. Public charging, home solar, multiple vehicles and incomplete odometer records can affect the approach. Confirm which method the salary-packaging provider supports.
How to create a better budget
- Use expected kilometres based on actual travel rather than a round guess.
- Obtain an insurance quote for the exact model and drivers.
- Check the manufacturer's service schedule and tyre size.
- Use realistic fuel consumption or EV energy use.
- Review the budget during the lease rather than waiting until the end.
General information: Eligible expenses, substantiation and reconciliation processes vary. Confirm the rules applying to your employer and provider.