An overview of the electric car discount and key considerations for businesses providing eligible electric vehicles.
Rules and thresholds can change. This article is general information and should be checked against current official guidance and your specific circumstances.
Understanding the exemption
Eligible zero or low-emissions vehicles may qualify for an FBT exemption when the statutory conditions are met. The vehicle must satisfy the relevant first-use, value and employee-use requirements, and employers still need appropriate records.
Important eligibility checks
The vehicle must fall within the eligible category and no luxury car tax can have been payable. Plug-in hybrid treatment changed from 1 April 2025, with limited transitional arrangements for qualifying pre-existing commitments.
What employers should retain
Keep purchase documents, evidence of first use, employee-use details, valuation information and calculations supporting the FBT position. Reportable fringe benefits obligations may still apply even where an exemption is available.
Review the rules before acting
FBT rules and thresholds can change. Review current ATO guidance and obtain advice based on the specific vehicle, agreement and employee arrangement before relying on the exemption.
