EVs have become cheaper to purchase thanks to the Government’s Fringe Benefits Tax (FBT) exemption when financed through a novated lease. This makes EVs more affordable for employees considering a switch to greener transport.
The EV market is rising in Australia, and businesses whose ESG strategy includes decarbonisation must add EV-novated leasing to their options for employee car finance. Here are some of the many benefits of doing so. For more information about the EV novated lease Adelaide, click here.
Save on Tax
With novated leasing, you pay for your new car out of pre-tax income. This means you save on the finance and running costs, making driving an EV cost-effective. As a bonus, the GST on your car is also eliminated.
The great news is that, with a novated lease, you can now enjoy significant extra savings on an eligible electric vehicle thanks to the Australian Government’s Electric Car Discount policy. The FBT exemption means EVs and PHEVs with a purchase price under $84,916 are now eligible for salary packaging before tax.
You can now get a new $50,000 EV with all the bells and whistles for around $160 a week, including finance, charge, insurance, roadside assistance and tyres. This is all made possible by the new FBT exemption and the lower running costs of EVs. Calculate your potential novated leasing tax savings with the novated lease calculator below. For more information about the EV novated lease Adelaide, click here.
Lower Running Costs
You’ll save money on fuel, servicing and tyres with an EV. A full charge of an electric vehicle can take up to 300 kilometres, and many charging stations across Australia exist. We can provide a home charging kit so you can plug your car in overnight to reduce costs further.
Electric cars also tend to have fewer moving parts than petrol-based vehicles, so they don’t break down as often. We can ensure all the maintenance and electricity costs of your EV are covered in your lease payments, so there are no surprise out-of-pocket expenses.
For organisations with sustainability-minded policies, adding an EV-novated lease could be an opportunity to drive employee engagement, demonstrate corporate social responsibility and lower Scope 3 emissions. To help with this, state and federal governments offer financial incentives to encourage employees to switch to an electric vehicle, including the recent fringe benefits tax (FBT) exemption for new battery, hydrogen fuel cell or plug-in hybrid electric vehicles valued up to $84,916.
Zero Emissions
With a novated lease, you can help reduce Australia’s reliance on imported fuel and lower our carbon footprint. Newer EVs are quieter, and some even let you return electricity to the grid.
Transport accounts for 19% of Australia’s emissions, making it one of our most significant sources of pollution. Switching to an EV can cut this amount by up to 40%.
The Australian Government introduced a law in 2022 that makes eligible electric cars (BEVs) and plug-in hybrid electric vehicles (PHEVs) FBT exempt if provided through a novated lease. This can save employees up to $4,700 annually compared to an internal combustion engine vehicle. For more information about the EV novated lease Adelaide, click here.
FBT exemptions are usually applied to all package running costs included in the novated lease payment, including car insurance, registration and maintenance. But always check your novated lease quote for add-ons that may not benefit you. These include dent protection and wheel repair, which can eat into your savings.
Easier to Sell
The lower running costs of EVs can make them significantly cheaper to own and operate than traditional petrol vehicles. With rising electricity prices in Australia, it’s even more cost-effective to switch to an EV.
Novated leasing is a tax-efficient way to finance an EV and save on running costs. Unlike car loans, regular payments on a novated lease come from a combination of pre-and post-tax salary. This can reduce your taxable income by thousands of dollars per year.
The Federal Government introduced the Electric Vehicle (EV) Discount in 2022, removing FBT on all eligible EVs and PHEVs valued under $89,332 (FY2023/24). This, combined with the reduced running costs of EVs, can result in substantial savings for employees who choose to finance an EV through a novated lease.