The Electric Car Discount policy is now here which means most EVs currently on the market will be exempt from the 47% Fringe Benefits Tax (FBT). That means your next car could be Tax and GST free.
Direct payment to suppliers, minimising claim & reimbursements
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The Federal Government has introduced and passed a Bill into Parliament to amend the FBT Act to place an exemption on EV, PHEV and Hydrogen power vehicles. The principle of this bill is to help make these vehicles more affordable for both fleets and employees using novated leasing. It is designed to help promote individuals and companies to switch to EV, PHEV and Hydrogen powered vehicles to reduce emission levels inline with the national emission reduction targets.
Now the Bill has been passed it will be retrospective from the 1st July 2022 and applies to vehicles with purchase price of up to $89,332 plus on road costs that have been sold and delivered after the 1st July 2022. Being exempt from FBT would mean that the average employee would not only save their marginal tax bracket, but all of the GST as well. This saving could range from a combined total 42% from an employee earning $80,000 per annum up to 57% for high income earners.
Tax saving at its finest. Novated leasing an Electric Vehicle provides 100% tax savings as well as GST relief, making this the smartest choice for all new car buyers.
We compare buying a Tesla Model 3 on a Novated Lease, versus a Car Loan, versus an outright cash purchase
Calculations are based on Tesla Model 3 SR with a purchase cost $67,225. Different state areas will have different purchase prices based upon stamp duty and State Government rebates. This scenario takes into account applicable registration, insurance, charging, servicing and tyre costs that a driver would be expected to pay based upon a taxable income of $110,000 per annum, travelling 20,000km per year, over a 5 year term. These scenarios take into account the differences under the amended FBT Assessment Act.
Make repayments, maintenance, charging costs, insurance and even registration from your pre-tax income, and reduce the amount of tax you pay upfront.
A range of novated car lease options allows you to choose those with flexible terms, fixed interest rates, and no deposit requirement.
With EV FBT exemptions, businesses will save by not paying FBT and also increase demand for novated leases of Electric cars as these exemptions make them a more attractive salary packaging option. Lastly, choosing an EV becomes a more enticing lease option as employees garaging their EV at home won't attract FBT.
With demand for EVs constantly going up, this means great trade in prices. With the world switching to low emission vehicles, international trends are starting to show higher resale values for low emitting vehicles compared to traditional ICE vehicles.
Our Novated Lease Packages include the following;
Includes $98 per week in running costs
Tax Savings $46,930
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Includes $77 per week in running costs
Tax Savings $42,285
Includes $74 per week in running costs
Tax Savings $35,900
Includes $104 per week in running costs
Tax Savings $48,915
Includes $92 per week in running costs
Tax Savings $41,630
Includes $73 per week in running costs
Tax Savings $32,565
Tax Savings $45,995
Tax Savings $29,895
Includes $75 per week in running costs
Tax Savings $40,605
Includes $81 per week in running costs
Tax Savings $38,250
Includes $79 per week in running costs
Tax Savings $44,045
Tax Savings $43,415
Includes $71 per week in running costs
Tax Savings $30,910
Includes $86 per week in running costs
Tax Savings $33,920
Tax Savings $40,955
Includes $80 per week in running costs
Tax Savings $32,220
Tax Savings $32,250
Tax Savings $38,575
Tax Savings $33,390
Tax Savings $39,285
Tax Savings $38,935
Includes $83 per week in running costs
Tax Savings $39,955
Includes $126 per week in running costs
Tax Savings $36,940
Includes $90 per week in running costs
Tax Savings $47,405
Includes $89 per week in running costs
Tax Savings $42,990
Tax Savings $32,550
Includes $82 per week in running costs
Tax Savings $35,950
Tax Savings $38,570
Includes $103 per week in running costs
Tax Savings $41,575
The FBT exemption on EVs allows an employee to pay for their vehicle using pre-tax only and not FBT or post-tax offset (ECM).
Your vehicle basically becomes fully tax-exempt (up to the Green luxury car tax limit), as long as it meets the conditions. This means a full pre-tax payment on your finance, rego, insurance, tyres, servicing and charging costs. It also entitles you to claim all the GST costs associated with these expenses via your employer.
Your employer has to process one pre-tax payment to PSP. No reporting, no hassles and no fuss. Talk with our Operations Manager about how easy this is to set up. Phone 1300 946 527.
This is a quick way to help increase an employee's net pay and reduce household costs.
We can contact your payroll and help set up this benefit. If your employer can set up and pay an extra superannuation deduction, they can set up an EV novated lease. We work with all payroll software such as reckon, MYOB and Xero.
Yes, you can claim your electricity costs when using a public EV charging station. Our vehicle expenses card allows you to pay directly from your salary packaging account without having to claim and reimburse. You can also claim charging costs at home if you have a separate meter for vehicle charging in order to separate the household and vehicle costs.
This benefit could potentially reduce your taxable income and reduce the total on your payment summary resulting in a lower taxable income you may receive a Reportable fringe benefits amounts (RFBA) which can affect things such as family tax benefit and child support payments
Hybrid Vehicles still utilise a petrol engine for the majority of power use and the battery engine for low-speed usage eg around shopping centres or on light highway driving, depending on the model.
It costs a lot less in "fuel or charging" costs to run an EV compared to an ICE vehicle, but costs are higher for items such as insurance and tyres. This is due to the higher premiums charges on EVs for comprehensive insurance and the general value of the vehicles being much higher in the initial purchase price. As an example, a Tesla 3 standard attracted an approx insurance cost of $1,600 per annum for a 35-year-old male based in Adelaide.
Positive Salary Packaging has also found a greater cost in tyre replacement and tyre wear with an increase in wear rate of approx. 25% compared to an ICE equivalent. These items are figured in the lease with pre-tax payments. The significant saving is in the charging vs bowser cost, with most drivers saving approx $2,900 per annum in cost.
Most EVs will come with a base-level charging system for your home using a standard 10 amp plug that can be utilised for your vehicle. Many clients simply add the wall-mounted unit for anywhere between $700 to $1,500 plus installation costs dependent on the brand of vehicle. This results in a much quicker charge and allows maximum efficiency when charging your vehicle.
The main model people think of vehicle is Tesla, but there are offerings from MG, BMW, Porsche, BYD and Polestar. Many manufacturers are in the process of bringing new models to the country as the initial sales of EVs start to increase and the national charging network continues to grow.
We believe that as the demand for vehicles grow and more manufacturers bring vehicles for sale in the country, the cost of the vehicles will drop slightly. Along with manufacturers being in vehicles with small car sizing too which will reduce the initial purchase cost.
This will vary on the size of the battery in the vehicle and the rate that it is being charged. Supercharging stations in some cases may be able to charge 50% of the battery within 30mins in some cases. Whilst a slow charging 10 amp fitment could take up 6-7 hours to achieve the same level.
This will vary from model to model but some models are now able to travel up to 600+ kms on a single charge. Most people adopting this technology are CBD or Urban based motorists that are using the car for commuting and on average may only commute 50-100kms per day that works perfectly for them, giving lower running costs and fewer emissions.
Batteries across many of the vehicles currently on the market have warranties of up to 4-8 years dependent on the brand. Long-term battery replacement is yet to be seen on many EVs on a wide-scale basis as the vehicles are so new to the market. This is something that can only be seen in the early hybrid vehicles, that occurred around the 10-year mark. In saying this, the level of technology and battery has greatly advanced in the last ten years, similar to that of mobile phones and laptop computers.
Whilst it may seem dangerous, the battery packs of Australia-delivered vehicles have met all the ANCAP-based requirements and ADR regulations for safety. These are no different in risk from standard petrol ICE vehicle that has 50-60 litres of high flammable liquid in the rear.
Not many of the initial EVs on the Australian market have been designed as towing vehicles, some have the ability for towbar style hitch, but this is more for external storage of items such as Bicycles. We expect this to change as larger more traditional manufacturing brands such as GM and Ford come to the market with more fit to purpose vehicles over the coming 18-24 months.
A great place to start is on the manufacturer's website and national motoring bodies' websites, like everything internet-based forums, can be very one-sided articles based upon personal bias either for or against. Like all vehicles, it's best to go to the showroom and sit, look feel, drive and touch the car to make sure that it meets your end goals.
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All novated examples are based on 60 months term traveling 15,000 kms per annum based upon a $85,000 annual income. Images are for display and illustration purposes only. Vehicle supply is subject to availability and pricing may change subject to manufacture discretion and could affect the estimated figures list above. Novated leasing or Vehicle Packaging works for the employee by substituting a taxable benefit compared to their current personal scenario. The above figures represent the estimated net impact on your income taking into account the assumed tax and GST savings. All applications are subject to normal credit criteria and assessment along with loan/lease suitability. Terms, conditions, fees and charges may apply.
It is best to seek financial advice from an independent specialist such as an accountant in regards to your own personal circumstances before solely relying on these figures.
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Save up to 42% off the running costs of an Electric Vehicle with the The Electric Car Discount amendment bill