Result
Annual tax savings
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This calculation is for informational purposes only and does not replace advice from a qualified professional. Formulas and rates may not fit your exact situation — double-check the figures before making decisions.
How it is calculated
Tax savings = annual lease payments × income tax rate ÷ 100. The logic is that lease payments reduce taxable profit as an expense in most jurisdictions, and that reduction in the tax base directly lowers the tax owed.
This is one of leasing's typical advantages over buying on a loan: with a loan, usually only asset depreciation and loan interest are expensed, not the whole payment, whereas the entire lease payment is often recognized as a period expense in full.
The rules for expensing lease payments and the applicable income tax rate differ between jurisdictions and can change, which is why both values are editable fields here, not built-in constants. Check the applicable rules with an accountant if you're unsure.