Novated Lease Payout Calculator
An expert tool to determine your lease settlement figure.
The final balloon payment amount set by the ATO at the start of your lease.
The number of monthly lease payments still to be made.
The full amount of each monthly lease payment.
The current balance of your funds for fuel, servicing, etc. Enter a negative value for a deficit.
Estimated Payout Figure
Total Remaining Payments
$7,800.00
Gross Payout Value
$22,800.00
Running Cost Balance
$1,200.00
Chart: Breakdown of Payout Components
Payout Amortization Schedule
The following table illustrates how your remaining lease payments contribute towards the total payout amount over the remaining term.
| Payment # | Lease Payment | Payout Balance Before Payment | Payout Balance After Payment |
|---|
Note: This table simplifies the calculation for illustrative purposes.
What is a Novated Lease Payout Calculator?
A novated lease payout calculator is a financial tool designed to estimate the total amount of money required to end a novated lease agreement prematurely or at its scheduled conclusion. This final figure, often called a settlement figure or payout amount, is crucial for anyone considering their options at the end of a lease. Whether you want to purchase the vehicle, trade it in for a new one, or simply understand your financial position, this calculator provides the clarity needed. It consolidates several key components—the residual value, remaining lease payments, and your running cost account balance—into a single, understandable number.
This tool is essential for employees who are currently in a novated lease arrangement and want to plan for the future. Accurately calculating the payout figure helps avoid surprises and enables informed financial decisions. Misunderstanding the components, especially the impact of the running cost account, is a common source of confusion, which this calculator aims to resolve.
Novated Lease Payout Formula and Explanation
The calculation for a novated lease payout figure is a straightforward sum of its core parts. The formula provides a clear path to determining your final financial obligation to the leasing company.
Payout Figure = Residual Value + Total Remaining Lease Payments – Running Cost Account Balance
Below is a breakdown of each variable in the formula.
| Variable | Meaning | Unit | Typical Range |
|---|---|---|---|
| Residual Value | The lump-sum amount required to take ownership of the car at the end of the lease, set by the ATO. | Currency ($) | $5,000 – $50,000+ |
| Total Remaining Lease Payments | The sum of all monthly lease payments yet to be paid until the end of the term. | Currency ($) | $0 – $50,000+ |
| Running Cost Account Balance | The net balance of funds set aside for fuel, insurance, and maintenance. This can be a positive credit (subtracted) or a negative deficit (added). | Currency ($) | -$5,000 – $5,000+ |
Practical Examples
Example 1: Nearing Lease End with a Healthy Account
An employee is nearing the end of their lease and wants to know the payout figure to own the car.
- Inputs:
- Residual Value: $12,000
- Remaining Lease Payments: 3
- Monthly Lease Payment: $700
- Running Cost Account Balance: $1,500 (Credit)
- Calculation:
- Total Remaining Payments: 3 * $700 = $2,100
- Payout Figure: $12,000 + $2,100 – $1,500 = $12,600
Example 2: Early Termination with a Running Cost Deficit
An employee needs to terminate their lease early due to a change in employment and has overspent on their running cost budget.
- Inputs:
- Residual Value: $20,000
- Remaining Lease Payments: 24
- Monthly Lease Payment: $800
- Running Cost Account Balance: -$500 (Deficit)
- Calculation:
- Total Remaining Payments: 24 * $800 = $19,200
- Payout Figure: $20,000 + $19,200 – (-$500) = $39,700 (Note: Subtracting a negative becomes an addition)
Considering an early lease termination? Learn more about the potential costs with our car lease settlement figure guide.
How to Use This Novated Lease Payout Calculator
Using this calculator is simple. Follow these steps to get an accurate estimate of your lease payout amount:
- Enter the Residual Value: Find this figure in your original lease agreement. It is the mandatory balloon payment required at the end of the term.
- Input Remaining Payments: Enter the number of monthly payments left on your lease contract.
- Provide the Payment Amount: Enter the full value of one of your monthly lease payments.
- State Your Running Cost Balance: Check with your lease provider for the current balance of your running cost account. If you have used more funds than budgeted, enter this as a negative number (e.g., -500).
- Review Your Results: The calculator will instantly display the primary payout figure. The intermediate values show how the novated lease residual value and other components contribute to the total.
The results allow you to understand your precise financial standing and make a clear decision about your vehicle.
Key Factors That Affect Your Novated Lease Payout
Several factors can influence the final payout figure. Understanding them is key to managing your lease effectively.
- Lease Term Length: A longer lease term generally results in a lower residual value percentage set by the ATO, but more total payments are made over the life of the lease.
- Early Termination: Choosing to end your lease early is the biggest factor. The payout will include all remaining lease payments, making it significantly higher than a standard end-of-term payout.
- Residual Value (Balloon Payment): This is a fixed, significant portion of the payout figure, mandated by ATO guidelines to ensure the agreement remains a lease and not a hire-purchase.
- Running Cost Management: Your diligence in managing your budgeted running costs (fuel, maintenance, etc.) directly impacts the final figure. A surplus in your account reduces the payout, while a deficit increases it.
- Vehicle Choice and Depreciation: The make and model of your vehicle affects its market value. While the ATO sets the minimum residual percentage, a car that holds its value well may be sold for more than the residual, potentially giving you tax-free profit.
- Interest Rates: The interest rate on the lease financing is bundled into your monthly payments. A higher rate means higher total payments over the term, which inflates the payout figure if ending early.
Exploring your end of lease options early can save you a significant amount of money and stress.
Frequently Asked Questions (FAQ)
The residual value is just one component of the payout figure. The full payout figure also includes any remaining lease payments and adjustments for your running cost account balance.
If your account is in deficit (a negative balance), that amount will be added to your payout figure, increasing the total you need to pay.
The primary way to have a lower payout figure is to complete the full lease term. If you have a surplus in your running cost account, this will also reduce the final amount owed.
Yes, early termination is usually costly because the payout figure must include all remaining lease rental payments plus the residual value.
Your original lease contract will contain the residual value and monthly payment amount. For the most up-to-date running cost balance and number of remaining payments, you should contact your novated lease provider directly.
No, the residual value portion of the payout must be paid with post-tax funds. However, any surplus in your running cost account is credited against the total amount due.
This is known as negative equity. If you sell the car for less than the payout amount, you are responsible for paying the difference out of pocket.
The components, like the residual value, are inclusive of GST. Your lease payments have a complex tax treatment, but the final figure presented by your provider is the total amount you need to pay. To understand the full tax implications, see our guide on how to calculate lease payout.