Electric cars can be exempt from FBT
/The end of March brings with it the end of the fringe benefits tax year. Fringe benefits tax is paid by employers on certain benefits provided to employees, like private use of a work car, parking, entertainment, gym memberships, and more.
Unfortunately, fringe benefits are taxed at 47%.
Cars are by far the most common fringe benefit, but there’s an interesting exemption for electric vehicles. In particular, from 1 July 2022 employers do not pay FBT on eligible electric cars and associated expenses, as long as they meet certain conditions.
it must be a zero or low emission vehicle;
it must have been first held and used after 1 July 2022;
it must be used by a current employee or their family;
it must be exempt from the luxury car tax;
and, it must be designed to carry less than 1 tonne and fewer than 9 people.
So if you’re looking to reduce your FBT bill, an electric vehicle is worth considering.
Of course, there are always exclusions, including scooters, motorcycles, and some hybrid cars, but we can help you work through the rules if you’re interested, so don’t hesitate to reach out.