Are you a freelancer or contractor wondering if a novated lease is right for you?

You’ve probably heard that novated leasing offers tax savings, fixed running costs, and bundled payments for your car, insurance, servicing, and more. It sounds perfect, until you read the fine print.

Here’s the deal: freelancers and sole traders are not eligible for novated leases.

If you’re self-employed and don’t receive a regular salary through payroll from an employer, a novated lease isn’t available to you.

This article breaks down who can and can’t access a novated lease, and what alternatives freelancers should consider instead.

Why Freelancers Are Ineligible for Novated Leases

A novated lease requires a three-party agreement:

Employee, the person who will drive the car
The employer, who processes salary deductions for the lease
Lease Provider, who supplies and manages the lease

If you’re a freelancer or sole trader, you don’t have an employer to process salary deductions through payroll. That means you can’t salary package a novated lease.

Even if you earn consistently, manage your own business, or work full-time as a contractor, it’s not enough unless you’re set up as an employee on someone else’s payroll.

Not Eligible:

Freelancers
Sole traders
Self-employed business owners with no external employer

Who Can Access a Novated Lease?

While freelancers are excluded, some contractors may still qualify if their work is structured through a payroll system.

You may be eligible if you:

Are employed under a fixed-term or contract basis
Work through a labour-hire agency or umbrella company that manages your payroll
Are you a government employee, an ADF member, or a contractor with employer benefits

You may be eligible if:

You receive a payslip
Your employer offers salary packaging
You work for TAS Health, ADF, or similar approved payroll-based organisations

Still unsure? Speak with a leasing specialist to confirm your specific situation.

Benefits of Novated Leasing for Eligible Employees

If you meet the eligibility criteria, here’s what a novated lease offers:

Fixed Weekly Payments

Know what you’re paying each week with one simple amount covering vehicle costs, including:

Finance
Insurance
Registration
Fuel or public charging
Maintenance and servicing
Tyres

Pre-Tax Deductions

Your lease payments come out of your pre-tax income, reducing your taxable income and potentially increasing your take-home pay.

Access to Great Vehicle Deals

Leasing providers often negotiate better prices than individuals. For example:

MG4 Excite Electric: from $151/week (fully maintained)
Tesla Model Y: from $199/week
Kia EV6 GT: from $289/week

These are just a few of the many vehicles available through novated leasing.

Final Thoughts

Novated leases offer fantastic value for the right person. But if you’re a freelancer or sole trader, it’s important to know you don’t qualify. Rather than waste time applying for something out of reach, explore options designed for your situation, like chattel mortgages or business vehicle finance.

If you’re unsure whether your work setup qualifies you for a novated lease, contact Novated Finance Australia.

Our team can quickly assess your eligibility and guide you toward the most appropriate vehicle finance solution.

FAQs

No. Sole traders and freelancers are ineligible because they don’t have an employer to process pre-tax deductions through payroll.
If you're through an employer or agency and receive payslips, you may be eligible. Check if salary packaging is available.
Yes. Consider a chattel mortgage, business loan, or personal loan depending on your income and usage needs.
Not through novated leasing. You may still be eligible for other EV incentives, but not FBT exemptions tied to novated leasing.

Novated Leases for Contractors: What You Need to Know (and Why Freelancers Are Ineligible)