From 1 July 2022 employers do not pay FBT on eligible electric cars (EV’s) and associated car expenses.
This means if a business owns an eligible vehicle there is no FBT payable on the private usage of the vehicle.
In a highly competitive labour market, offering salary packaging options for employees who are interested in EV’s could be a great value add.
You do not pay FBT if you provide private use of an electric car that meets all the following conditions. For further detail on eligibility click on the link:
- the car is a zero or low emissions vehicle
- the first time the car is both held and used is on or after 1 July 2022
- the car is used by a current employee or their associates (such as family members)
- luxury car tax (LCT) has never been payable on the importation or sale of the car.
If you are a business client and would like to consider one of these vehicles for yourself or your employees, please reach out to your accountant to discuss how this could work for you.
If you are an employee and are interested, suggest having a conversation with your employer about this exemption and see if they are open to a salary packaging arrangement.