Albanese Tax Reforms Are Passing — Here's What It Means for PAYG Workers
The Albanese Government's 2026 tax reform package is one step closer to law. Find out what the worker tax cuts mean for your novated lease take-home pay.
On 23 June 2026, the Treasury Ministers' office confirmed the Greens will support the first tranche of the Albanese Government's tax reform legislation, bringing it a step closer to becoming law (Source 1). The package is framed around three pillars: cutting taxes for over 13 million workers, making it easier for first home buyers to enter the market, and better aligning the tax treatment of labour income versus asset income.
For most PAYG employees, the headline is simple: your marginal tax rate may be about to drop. That matters more than you might realise if you already have — or are considering — a novated lease.
What this means for novated lease customers
A novated lease works by redirecting a portion of your pre-tax salary to cover vehicle running costs, which reduces the income exposed to income tax. The lower your marginal rate, the smaller the raw tax saving per dollar packaged — but the flip side is that your take-home pay baseline rises, meaning you have more room to structure a lease without it feeling like a squeeze.
If you're sitting on the fence about whether to start a novated lease, a legislated tax cut is a reasonable prompt to run the numbers properly rather than assume last year's estimate still applies. The interaction between your new marginal rate, your employer's FBT obligations, and the EV FBT exemption (still in force for eligible zero and low-emission vehicles) all shift when the tax tables change. According to the Treasury release [Source 1], the reforms specifically aim to better align the treatment of labour and asset income — which over time could also influence how salary packaging rules are reviewed, though no changes to FBT or salary packaging have been announced as part of this tranche.
Bottom line: a tax cut for workers is generally good news for anyone using pre-tax salary structures. But the exact impact on your novated lease depends on your individual income, vehicle choice, and employer arrangement — not a generic headline number.
Common questions
Will the tax cuts change how FBT on my novated lease is calculated?
Not directly. FBT is set by separate legislation and the current reform package does not include changes to FBT rates or the EV FBT exemption. However, your income tax position — which affects the net benefit of packaging — will change if the reforms pass in full.
Does a lower marginal tax rate make a novated lease less valuable?
Not necessarily. A lower marginal rate does reduce the tax saving per dollar packaged, but it also increases your baseline take-home pay. The overall picture depends on your specific income bracket and vehicle costs — run an updated quote once the new tax tables are confirmed.
The legislation hasn't fully passed yet — should I wait before taking out a lease?
The reforms still need to clear the Senate. If your current lease or vehicle circumstances make sense right now, waiting for parliamentary process isn't usually the right call. Speak to an adviser about structuring your lease under current rules, with an eye on how a rate change would affect your repayments.
Does the small business CGT amendment in this bill affect novated leasing?
The CGT amendment extends eligibility to 2.7 million active small businesses and is unrelated to employee novated leasing arrangements. It's relevant if you're a small business owner, but it doesn't change how a standard PAYG novated lease is structured or taxed.
Is millarX qualified to advise me on how these tax changes affect my lease?
millarX is ACL-licensed (ACL 569484), AFCA-registered, and a member of the FBAA. We can walk you through how your novated lease is structured under current and proposed tax rules, though formal tax advice should come from your accountant.