Novated Lease When You Change Jobs: What Happens to Your EV Lease (2026)

When you change jobs, your novated lease doesn’t end. It comes back to you. The novation agreement is a three-way deal between you, your employer and the finance company, and when you leave, your employer steps out and the lease reverts to your name. You then choose one of four paths: transfer it to your new employer, keep paying it yourself, refinance, or pay it out. Most people transfer it. In a typical novated lease change jobs scenario, the fees come to a few hundred dollars.

The mechanics are simple. The details are where people get caught out. You can end up paying a month or two of lease payments from your after-tax salary while paperwork catches up, and your leftover running-cost budget doesn’t follow you. Your new employer might use a provider who wants to refinance the whole thing.

There’s a bigger issue on the horizon too. From 1 April 2027 the EV fringe benefits tax exemption starts winding back, and nobody has yet confirmed how a job change after that date is treated. That’s covered in detail below.

What happens to a novated lease when you change jobs

Your lease keeps running, but the tax arrangement pauses. The finance contract sits between you and the financier, and it exists whether you’re employed or not. The novation agreement is the part that ends. That’s the arrangement where your employer takes on your lease payments and deducts them from your pre-tax pay.

You then have four options:

Option	What it involves	Tax benefit	Typical cost
Transfer (re-novate) to new employer	New employer takes over the lease payments through its payroll	Kept	Transfer fee, e.g. $300 ex GST (Alliance Leasing)
Keep paying privately	You pay the financier directly from after-tax income	Lost	No fee, but higher effective cost
Refinance	A new lender pays out the old lease and you start a new loan or lease	Depends on new arrangement	Payout plus new establishment fees
Pay out	Settle remaining payments plus the residual	Ends	Payout plus termination fee, e.g. $660 incl GST (SG Fleet)

Sources: Alliance Leasing, SG Fleet and FleetPartners published terms, accessed September 2026. Fees as of September 2026 and vary by provider and employer.

Some providers charge no termination fee at all. FleetPartners says a payout is just the remaining payments plus the residual. Others build fees into your employer’s agreement, so two people with the same provider can face different charges. Check your own lease documents before you resign.

Transferring your novated lease to a new employer

A transfer is the cheapest option in almost every case. Your new employer signs a fresh novation agreement with your existing lease, and pre-tax deductions restart through their payroll. The finance component stays the same: same financier, same residual and same end date.

The catch is that your new employer has to agree. Not every employer offers salary packaging, and those that do usually work with a panel of approved providers. If your current provider isn’t on the panel, you have two routes:

Ask the new employer to accept an outside provider. Many will, particularly for an existing lease. Raise it during salary negotiations, when you have the most bargaining power.

Move the management to their panel provider. The new provider takes over administration, while ideally the finance stays where it is. People who’ve done this say the loan itself stays as it was, and only the company managing it changes.

Watch for a panel provider who wants to refinance into its own finance. That’s not a transfer. The old lease gets paid out, a new one starts, and you pay new establishment fees and get a new residual. It may also count as a brand-new arrangement for FBT purposes, which matters after April 2027.

Your per-pay deduction will probably change even when the finance stays the same. Management fees vary by employer and provider. Maxxia, for example, says its fees “may vary depending on your employer”. The new provider also recalculates your running-cost budget and the split between pre-tax and post-tax contributions. People who’ve switched mid-lease also report larger deductions for the first few pay cycles. The new provider has to start paying the financier immediately, with no deferred payments to smooth things out.

The gap between jobs: who pays and what you lose

You pay the lease yourself during any gap, from after-tax income. The financier still wants its monthly payment, and there’s no employer to deduct it pre-tax or claim the GST credits. Paying the same amount from after-tax income makes each payment noticeably more expensive than you’re used to.

How long the gap lasts depends on timing. Your final pay date, the lease payment date and your new start date all have to line up. People who’ve been through it describe anything from dodging the gap by a few days to paying two months out of their own pocket. A few things help:

• Give your provider notice early. Smart Salary’s terms ask for 10 business days’ notice that you’re leaving.
• Start the re-novation paperwork before your first day. Your new employer’s HR team and the provider can prepare the agreement in advance.
• Expect your final pay to be held back. Smart’s terms allow it to hold your final pay for up to six weeks while it reconciles a novated lease account.

The running-cost budget is the other surprise. Your provider collects money each pay for fuel or charging, tyres, servicing, insurance and rego. When you leave, that account is reconciled, not transferred. LeasePLUS’s terms, for example, say any surplus goes back through your old employer’s payroll, taxed as ordinary income, and can’t be used towards the residual. A shortfall is invoiced, due within five business days. Insurance and rego paid through the lease may be refunded pro rata or kept running, depending on the provider.

If you’re between jobs for a while, or your new employer doesn’t offer packaging, run the numbers on paying out versus paying privately. Our novated lease hidden costs guide breaks down the fees that apply when a lease ends early.

What happens to a novated lease if you’re made redundant

Redundancy works the same way as resigning. The novation agreement ends on your last day, the lease reverts to you, and the financier keeps collecting its payment. FleetPartners, for example, says the agreement ends on your final day whatever the reason, and you then pay it by direct debit. What’s different is that you may have no income and no new employer lined up.

Your options are the same four as any job change, plus one more if you bought lease protection insurance:

• Keep paying privately until a new employer re-novates the lease. Owners who’ve done this describe it as expensive but simple. One worked out their payment rising from about $168 a week pre-tax to $275 a week from after-tax pay.
• Transfer it later once you find work, if the new employer offers packaging.
• Refinance into an ordinary car loan.
• Pay it out from savings or your redundancy payment.
• Claim on lease protection insurance, if you have it, which can cover payments or let you hand the car back.

Your redundancy payout can’t go to the lease pre-tax. The ATO says a salary sacrifice arrangement only works for pay you haven’t earned yet. Leave and redundancy pay were earned before the arrangement, so they’re paid to you as normal and any lease payout comes from after-tax money (ATO salary sacrificing for employees). Easi makes the same point: once you leave, you can’t use pre-tax funds to buy the car outright.

Refinance before your last day if you can. A lender assesses your income, and that’s hard to show once you’re unemployed. Owners who refinanced while still on the payroll, or while their leave was being paid out, found it straightforward. One who tried after leaving struggled to get approved. If you’re on notice of redundancy, ask your financier about converting the lease to a standard loan before your final pay.

Paying out early can cost more than the balance. Some financiers charge break costs on a fixed-rate lease when interest rates have fallen since you signed. Owners report early payout charges ranging from a single month’s payment to the remaining interest for the term. Ask for a written payout figure and an itemised list of fees.

Selling the car only works if it’s worth more than the payout. If it is, you keep the difference. Used EV prices have fallen fast, though. RedBook data analysed by Savvy found a 2022 Tesla Model Y RWD was selling about 48 percent below its new price in early 2026 (Savvy, 2026). Get a dealer valuation and your payout figure on the same day before you decide.

Formal hardship rights may not apply. Novated leases sit outside the National Credit Code, which carries the hardship provisions that cover most car loans. Ask anyway. Maxxia says your financier may offer hardship options, and lenders usually prefer a payment arrangement to a repossession.

One more owner-reported warning: get every step of a transfer confirmed in writing. People who’ve moved providers describe a lease being paid out and restarted with a new residual, or closed without notice, when they expected a straight transfer. A new residual can leave you owing more at the end than your original contract did.

Lease protection insurance: what it covers

Lease protection insurance pays your lease while you’re out of work, and some policies let you hand the car back. It’s sold by most large providers, and the premium is usually built into your lease payments.

Provider	Job-loss cover	Running costs	Cap	Hand-back option
RemServ	Up to 10 months of lease payments	$400 a month, up to $4,000	$40,000	After 3 months of payments
Oly	Up to 10 months of lease payments	$400 a month, up to $4,000	$50,000	After 3 payments
Smart	Up to 10 months of lease payments	$400 a month, up to $4,000	Not published	After 3 payments

Sources: RemServ lease protection insurance guide; Oly lease protection product disclosure statement (July 2025); Smart lease protection page (2026). Premiums aren’t published, so ask your provider. Cover as of October 2026.

The exclusions matter more than the headline cover. RemServ’s and Oly’s policies don’t cover voluntary redundancy, resignation, misconduct, or job loss you already knew about when you bought the policy. Claims also need you to be out of work for 30 days first. That voluntary redundancy exclusion bites. Of 1,328 public servants made redundant in 2025-26, 1,193 took voluntary packages, according to Australian Public Service figures reported by the Canberra Times (October 2026).

Owners who bought the cover describe it as cheap relative to the peace of mind, and some report handing the car back at no cost after a redundancy. It’s still add-on insurance. Moneysmart’s guide to consumer credit insurance warns this type of cover is often poor value, so read the exclusions and decide whether your job is genuinely at risk before you pay for it.

Changing jobs and the EV FBT exemption

Under current law, changing jobs doesn’t cost you the EV exemption. The ATO’s electric car exemption applies to a zero-emissions car that was first held and used on or after 1 July 2022 and was below the luxury car tax threshold for fuel-efficient vehicles when first sold. That threshold is $91,661 for 2026 to 2027, up from $91,387. The “first held and used” test looks at when the car was first on the road, not when your current employer took it on. An eligible EV stays eligible with a new employer.

The rules change from 1 April 2027. In the May 2026 Budget, the government announced a phased wind-back of the exemption (Treasury ministers’ release, 5 May 2026):

When the arrangement starts	EV at or below $75,000	EV above $75,000 (below LCT threshold)
Before 1 April 2027	Full exemption for the life of the arrangement	Full exemption for the life of the arrangement
1 April 2027 to 31 March 2029	Full exemption	25 percent FBT discount
From 1 April 2029	25 percent FBT discount	25 percent FBT discount

Sources: Budget 2026 to 2027; Treasury exposure draft, September 2026. Not yet law.

The Budget papers say cars keep the treatment in place “when the fringe benefit arrangement starts, for the life of the arrangement”. Treasury released exposure draft legislation on 14 September 2026, with submissions closing 28 September 2026. It frames protection around the “commitment” under which the car is provided: the full exemption lasts until that commitment ends. The bill hasn’t yet been introduced to Parliament.

Nobody has officially answered whether a job change creates a new commitment. There is a strong clue. When the plug-in hybrid exemption ended in April 2025, the ATO’s guidance stated that a change of employer results in a new commitment, even within the same corporate group. Providers applied it strictly. SG Fleet warns that any change of employer makes a plug-in hybrid lease ineligible for the exemption. The new EV rules use the same “commitment” concept, and some providers are already cautioning that moving employers may affect how they apply.

If the ATO takes the same approach for EVs, which is our reading and not official guidance, the practical result would be:

• EV at or below $75,000, new job before 1 April 2029: still fully exempt.
• EV above $75,000, new job on or after 1 April 2027: drops to the 25 percent discount.
• Any EV, new job on or after 1 April 2029: 25 percent discount.

For many people this changes little, because most mainstream EVs, including every car in our best EVs under $60,000 guide, sit below $75,000. If yours is above that line and you expect to move jobs in the next few years, get your provider’s view in writing and watch for the final legislation. Our EV FBT exemption guide tracks the changes as they’re confirmed.

Should you avoid a long lease if you might change jobs?

Not usually. A likely job change is a reason to plan, not to skip the lease. Transfers are routine: the automobile club AANT describes novated leases as fully portable between employers, provided the new employer agrees. The Treasury review released in May 2026 found nearly 100,000 people had used the EV exemption by late 2025, mostly through novated leases. The novated leasing industry association NALSPA estimates more than 500,000 Australians have a novated lease (ABC, April 2026). Providers handle job changes all the time.

The real risks are narrower:

Your next employer might not offer packaging. Novated leasing depends on the employer agreeing to run it through payroll, and not every business sets that up. If you’re likely to move into a small business or contracting, a shorter lease or a lower residual reduces your exposure.

A long gap between jobs. Months of after-tax payments eat into the savings. An emergency fund covering two or three lease payments is sensible insurance.

A higher-priced EV after April 2027. As above, the rules for cars above $75,000 are still unsettled.

It’s worth modelling a mid-lease exit before you sign. Our novated lease calculator shows your pre-tax and post-tax costs, and our guide to novated lease residual values explains what you’d owe at each point in the term.

If the car is written off mid-lease

A write-off ends your lease early, and the residual doesn’t go away. Your comprehensive cover pays the car’s market value, and if that’s less than your payout figure, you owe the difference. Some buyers only discover this when they read the invoice and fine print after an accident.

Gap or total-loss cover fills that shortfall. Oly’s Total Loss Assist, for example, pays the gap between the insurance payout and the lease payout, up to $60,000, once your comprehensive cover has paid out a total loss. If you’re changing providers during a job move, check this cover carries over. It’s often tied to the provider’s insurance package.

For the full picture on how novated leases work, including how to compare quotes, see our EV novated leasing hub and the electric vehicles section.