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Mammabear(Newbie)Newbie
4 Mar 2026

good morning.

I am hoping to get a clear answer as i have received conflicting information and im so confused.

I am a single mum and have been looking at novated leasing a car to keep it all in one neat expense package.

Then i learnt that it is reportable as a fringe benefit (grossed up) so actually can increase my reportable annual income which can negatively impact my child support and benefits etc.

The novated company have told me that hybrid cars are not reportable fringe benefit as they structure it like a superannuation salary sacrifice? Is that correct?

I need clear information as i need to weigh up if the tax savings actually outweigh the decrease in benefits.

thank you in advance.

197 views
3 replies
197 views
3 replies

Most helpful response

Most helpful reply

NikkiATO(Community Moderator)Community Moderator
5 Mar 2026

Hi @Mammabear,


No, hybrid cars under a novated lease are not exempt from being reportable fringe benefits. The FBT exemption only applies to eligible electric cars that meet the criteria. Plug‑in hybrids lost eligibility from 1 April 2025, except where there was a binding commitment in place before 1 April 2025. Standard hybrids (non‑plug‑in) were never eligible.


For a novated car, if your total fringe benefits exceed $2,000 for the FBT year, your employer must report a grossed‑up RFBA on your income statement. You don’t pay income tax on that amount, but Services Australia and Child Support do use it in income tests, which can reduce benefits.


Salary‑sacrificed super doesn’t create an RFBA, but a novated car does (unless you have $0–$2,000 of benefits). 

All replies

Glenn4802(Devotee)Devotee
5 Mar 2026

If you will be making post tax contributions, these can reduce the taxable value to nil. If that is case you will not have a reportable fringe benefits amount.

Most helpful reply

NikkiATO(Community Moderator)Community Moderator
5 Mar 2026

Hi @Mammabear,


No, hybrid cars under a novated lease are not exempt from being reportable fringe benefits. The FBT exemption only applies to eligible electric cars that meet the criteria. Plug‑in hybrids lost eligibility from 1 April 2025, except where there was a binding commitment in place before 1 April 2025. Standard hybrids (non‑plug‑in) were never eligible.


For a novated car, if your total fringe benefits exceed $2,000 for the FBT year, your employer must report a grossed‑up RFBA on your income statement. You don’t pay income tax on that amount, but Services Australia and Child Support do use it in income tests, which can reduce benefits.


Salary‑sacrificed super doesn’t create an RFBA, but a novated car does (unless you have $0–$2,000 of benefits). 

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Is a hybrid car reportable for fringe benefits under a novated lease? | ATO Community