How do on-road costs affect a novated lease residual value?

 Author: PollyATO(Community Support)Community Support

14 July 2026

Hi there lucylin8005,

How a novated lease provider works out the residual value, and which costs are included in the financed amount, is determined by the terms of the lease agreement and the leasing provider's policies. This is something you'll need to discuss directly with your employer and the leasing provider.

In your example, SG Fleet appears to be calculating the residual value based on the amount financed under the lease agreement. Whether that amount includes on-road costs, stamp duty, registration fees or unrecovered GST is determined by the finance arrangement.

Our residual set the minimum residual value required for a lease to qualify for the relevant tax treatment. They don't tell lease providers how to calculate the finance amount or which costs they must include in it. The amounts financed under the lease may be different to the vehicle value used for FBT purposes.

It's not unusual for GST to apply to the residual amount. If the lease ends with you purchasing the vehicle, the transaction may be a taxable supply, and GST may be payable on the residual value.

If you're concerned about whether the residual has been calculated correctly, the best source of information will be your lease documentation and SG Fleet's explanation of how the financed amount and residual value have been determined.

We can't provide advice on the commercial terms or value of a specific lease product. For info around this, we'd suggest reaching out to a professional financial advisor.

Reply0 likes

• Report as inappropriate