EV-a2zEV-a2z
Notification Show More
Aa
  • News
    • EV Type
      • BEV
      • HEV
      • PHEV
      • FCEV
    • System
      • EV
      • Battery
      • Charging Infra
    • Veh. Type
      • Bike
      • 3 Wheeler
      • Car
      • Bus
      • Truck
      • Aircraft
    • Country
      • United States
      • United Kingdom
      • Australia
      • India
      • China
      • Germany
      • Japan
      • Canada
    • Company
      • Tesla
      • BYD
      • General Motors
      • Ford
      • Toyota
      • Volkswagen
      • Hyundai
      • Stellantis
    • Energy
      • Solar Energy
      • Wind Energy
  • Reviews
  • FAQ
  • Listicles
  • Sales Report
  • Guidance
    • Policy
    • Standards
    • Regulations
  • Books
  • Expo
  • Glossary
Search
© EV-a2z. All Rights Reserved.
Reading: Electric cars and ‘Fringe Benefits Tax’ exemption: Everything you need to know
Share
Aa
EV-a2zEV-a2z
Search
  • News
    • EV Type
    • System
    • Veh. Type
    • Country
    • Company
    • Energy
  • Reviews
  • FAQ
  • Listicles
  • Sales Report
  • Guidance
    • Policy
    • Standards
    • Regulations
  • Books
  • Expo
  • Glossary
Follow US
EV-a2z > News > Electric cars and ‘Fringe Benefits Tax’ exemption: Everything you need to know
News

Electric cars and ‘Fringe Benefits Tax’ exemption: Everything you need to know

EV-a2zm
Last updated: 2023/02/09 at 6:42 AM
EV-a2zm Published February 8, 2023 7 Min Read
Share
7 Min Read
TESLA Recharging
SHARE

Many potential buyers of electric cars were relieved to hear that the federal fringe benefits tax (FBT) will be exempted for employers who provide electric vehicles for their employees to use. However, it must be noted that only employees who have access to a novated lease program through their employer are, at the highest level, eligible for this exemption.

Contents
Details on the taxation of fringe benefits FBT calculation on a carFBT exemption for electric vehicle buyersEVs that qualify for FBT exemption

While this is typical for employees of large Australian or international corporations, many small businesses may need to speak with a financial or tax advisor to determine whether or not they can afford to offer their staff this.

In Australia opportunities around EVs and FBT exemptions around salary packaging for employees (source attached: EY). pic.twitter.com/IGKTCqjGmF

— Andrew J Proudfoot (@ProudyMan1) February 4, 2023

Details on the taxation of fringe benefits

According to the Australian Taxation Office, a fringe benefit is a ‘payment’ to an employee that differs from salary or wages.

The fringe benefits tax is a tax on this benefit levied on employers but frequently passed on to employees who lease their car through work through a novated lease.

In the case of vehicles, the fringe benefits tax is a 47% tax on the private use portion of a work vehicle.

 FBT calculation on a car

You can determine the “personal use portion” of your work vehicle in one of two ways: using a logbook or the statutory method.

The statutory method is based on a flat rate of 20% of individual use of a work vehicle.

This private use portion is then multiplied by the ‘gross-up rate,’ which is rounded up to account for any additional taxes withheld from the payment.

The resulting amount is then taxed at a rate of 47% on fringe benefits.

E.g., 20% of the value of a $75,000 work vehicle equals $15,000. It is then multiplied by a gross-up rate of 2.0802, resulting in $31,203 – 47 percent of $31,203 equals $14,665, the FBT amount.

Using the same method, the driver of a $45,000 work vehicle would incur an FBT bill of $8799.

A driver of a $55,000 car could face an FBT bill of $10,754 in the middle of these two price points.

Even though zero and low-emissions vehicles are exempt from FBT, the amount of FBT your truck would have incurred must still be calculated to determine your reportable fringe benefits amount, which can impact other aspects of your taxable income.

Get the Tesla Model 3 RWD on a novated lease and benefit from the new EV FBT exemption. Savings based on a 60-month lease with the car travelling 15,000kms per year. Residual value of 28.13% of on-road cost. Annual Salary of $100,000. Includes all eligible vehicle running costs. pic.twitter.com/qnV4shAoXy

— The Salary Packaging People (@salarypeople) January 19, 2023

FBT exemption for electric vehicle buyers

If you meet all the requirements and can buy a car like a Tesla Model 3 ($65,500 before on-road costs) through a novated lease, you will not be required to pay any FBT.

“From July 1, 2022, employers do not pay FBT on eligible electric cars and associated car expenses.”

Australian Taxation Office

Furthermore, if provided for an eligible electric vehicle, associated expenses such as registration, insurance, repairs, maintenance, and fuel or electricity costs for charging are exempt from FBT.

It provides a financial incentive for employees to buy electric cars through a novated lease and reduces the FBT bill for electric vehicles operated by fleets and company-car drivers by thousands of dollars.

On the other hand, private buyers who pay for an electric car out of their pockets will not benefit from the scheme.

Electric cars FBT exemption—

From 1 July 2022 employers do not pay fringe benefits tax on eligible #ElectricVehicles and associated car expenses.

Let us know if you need EV FBT clarification or assistance on 02 6686 3000.https://t.co/vaBnBfBtb8 pic.twitter.com/ijFFjPPRWX

— Collins Hume (@CollinsHume) January 30, 2023

EVs that qualify for FBT exemption

The vehicle you buy must be zero or low-emissions, which means it must have a full-electric, hydrogen fuel-cell, or plug-in hybrid drivetrain. Furthermore, it must be designed to carry a load of less than one tonne, so the new LDV eT60 ute would not be eligible.

Cars must also fall below the luxury car tax (LCT) threshold for fuel-efficient vehicles, which is $84,916 for the fiscal year 2022/23. (GST inclusive).

It should be noted that the scheme only applies to PHEV (Plug-in Hybrid) vehicles until March 31, 2025, after which PHEV vehicles will no longer be considered low-emission vehicles.

However, suppose you buy a PHEV before this date, and your novated lease period extends beyond April 1, 2025. In that case, you can still claim the FBT exemption until your agreement lease period ends.

In order to qualify, an electric vehicle must be used for the first time on or after July 1, 2022, even if it was previously held. It means that regardless of when it was purchased, the car can only be made available to employees after July 1. It does not qualify if an employee used it on or before June 30, 2022.

This time badge is based on when the car was first used, so if you buy a used car, even if it is your first time ‘using’ it, the ATO will consider it ‘used.’ You will not be eligible for the FBT rebate.

“An electric car is considered ‘used’ when it is used or available for use by any entity or person.”

Australian Taxation Office

Here is a list of current models that meet the FBT exemption criteria:

  • Mitsubishi Outlander Aspire PHEV costs $61,990 before taxes and fees.
  • Kia EV6 Air – $72,590 before taxes and fees
  • Tesla Model 3 Long Range costs $80,000 before taxes and fees.
  • Polestar 2 Standard Range Single Motor costs $63,900 before taxes and fees.
  • Standard Range BYD Atto 3 – $48,011 before on-road costs

You Might Also Like

Hyundai reveals battery suppliers of its EV models amid fire concerns

Uber boss casts doubt on Tesla’s Robotaxi vision

Tesla secures direct sales license in Kentucky

CATL launches showroom of EV models powered by its batteries in China

Tesla Semi to hit European roads

TAGGED: Australia, Electric Car, Electric Vehicle, EV, Tax Cuts
EV-a2zm February 9, 2023 February 9, 2023
Share This Article
Facebook Twitter Flipboard Whatsapp Whatsapp LinkedIn Reddit Email Copy Link

Follow US

Find US on Social Medias
Facebook Linkedin Twitter

Weekly Newsletter

Subscribe to our newsletter to get our newest articles instantly!

Popular News
TESLA
News

Zoom officially announced its video conferencing app is coming to Tesla vehicles

admin By admin November 9, 2022
Stellantis invests in EV production, causing the Jeep plant to close
Nissan introduces “X-in-1” E-Powertrains to save 30% on costs
Top Cobalt producing countries and companies
EV battery market leader CATL reported shares decline in January, BYD increases
- Advertisement -
Ad imageAd image

Tags

Australia (197) Autonomous Driving (110) Battery (805) BEV (71) BMW (105) BYD (319) Canada (74) CATL (84) Charging Infrastructures (360) China (749) Electric Truck (72) Electric Vehicle (4971) Elon Musk (324) Europe (466) EV (5090) EV Sales (169) Ford (180) Full Self-Driving (94) General Motors (118) Germany (134) Gigafactory (90) Honda (74) Hyundai (156) India (268) Japan (82) Kia (92) Lithium (74) Lithium-ion Battery (79) Mercedes Benz (83) NIO (101) Nissan (77) Renewable Energy (91) Rivian (76) Solar Power (99) Stellantis (117) Tesla (1564) Tesla Cybertruck (101) Tesla Model 3 (151) Tesla Model Y (178) Tesla Superchargers (90) Toyota (154) UK (150) USA (1518) Volkswagen (183) Volvo (76)

About Us

Your definitive guide to the electric vehicle and renewable energy transition, offering insights, news, and analysis on EVs and green energy trends.

Top Menu

  • News
  • Reviews
  • Listicle
  • EV Sales
  • FAQ

Resource

  • Policy/Standard/Regulation
  • Glossary
  • Books
  • Expo
Subscribe to Our Newsletter

Subscribe to our newsletter to get our newest articles instantly!

EV-a2zEV-a2z
© EV-a2z. All Rights Reserved.
  • About EV-a2z
  • Terms
  • Privacy
  • Cookie Policy
  • Contact
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
Do not sell my personal information.
Cookie SettingsAccept
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checkbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT
Newsletter Tesla red
Join Us!

Subscribe to our newsletter and never miss our latest news, podcasts etc..

Zero spam, Unsubscribe at any time.
Go to mobile version
adbanner
AdBlock Detected
Our site is an advertising supported site. Please whitelist to support our site.
Okay, I'll Whitelist
Welcome Back!

Sign in to your account

Lost your password?