EVs and PHEVs costing under $84,916 will be FBT exempt when purchased under a novated lease. It will make them even more affordable for employees whose Salary package their car costs pre-tax, potentially saving thousands.
Every new EV and PHEV on our website sells for less than the FBT limit and can be Salary Sacrificed before tax. It means you will save on Finance, Charge, Registration, Insurance
and running costs. For quality novated lease electric car FBT, check this out.
FBT Exemption
In 2022, new electric cars that are first held and used will be exempt from FBT if Salary is packaged under a novated lease. It will significantly improve the income tax savings for employees who use an EV as their novated lease car.
The EV FBT exemption (and the EV import tariff exemption) will make it cheaper to run an electric or plug-in hybrid vehicle on a novated lease than ever before. As these costs are deducted pre-tax, EV drivers can save around 47% of Fringe Benefits Tax on their running costs – making novated leasing an excellent option for anyone considering switching to an electric vehicle.
However, there are a couple of essential points to consider before making this decision. For starters, the EV FBT exemption only applies to new vehicles that carry one tonne or fewer passengers and have a $89,332 car value or less (plus delivery fees, options and accessories). It is also subject to review in 3 years.
Import Tariff Exemption
The FBT exemption removes one of the significant upfront expenses associated with a novated lease for an EV, making the vehicles more appealing to employees. Combined with the lower operating costs of an EV, this will help drive uptake.
The exemption applies to new battery-electric and plug-in hybrid electric vehicles first held on or after July 1 2022. It will include both standard-range and extended-range models of cars, SUVs and wagons. The exemption does not apply to motorcycles or scooters. It also does not apply to a car that is a conversion of an existing vehicle. The exemption will continue until April 1, 2025. It will not apply to vehicles leased or otherwise provided before this date.
Discount Policy
EVs and PHEVs are significantly more expensive than petrol cars when purchased outright, but thanks to a recent change in FBT laws, they have become even more affordable when acquired through a novated lease. It means that more people can take advantage of the great benefits EVs and PHEVs offer while optimising their financial wellbeing, improving their take-home pay and contributing towards a greener planet.
The new FBT exemption allows employees to salary sacrifice an eligible electric car and pay no FBT, provided it is under the luxury car tax (LCT) threshold for fuel-efficient vehicles ($84,916 in 2022-23). It helps to further stimulate demand for EVs and PHEVs by making them more affordable when bought through a novated lease.
Salary packaging is a way for employers to reimburse their employees for the costs of the vehicle by deducting them from pre-tax income, which includes car loan repayments, running expenses and registration. It is why many Aussies are choosing to salary package a fully digital novated lease with beCarWise, helping them optimise their take-home pay and get behind the wheel of an environmentally friendly EV or PHEV. For quality novated lease electric car FBT, check this out.
Getting Started
EV novated leasing is similar to traditional, with car finance and running costs (registration, insurance, fuel, servicing, roadside assistance, and tyres) all bundled into one convenient monthly payment. The critical difference is that the EV is FBT exempt, and because the vehicle is FBT free, the novated lease payments are made from pre-tax Salary, which can reduce your taxable income and help you save tax.