Salary packaging an Electric Car under new FBT Exemption

Starting 1 July 2022, new electric vehicles under the luxury car limit will be exempt from fringe benefits tax. This means an electric vehicle under $84,916 can be salary packaged for a substantial tax benefit.

For the exemption, a car must be classified as a zero or low emissions vehicle. Zero or low emissions vehicles include:

1. battery electric vehicles
2. hydrogen fuel cell electric vehicles, and
3.plug-in hybrid electric vehicles

Here is an example showing the difference an electric vehicle will make in salary sacrifice options. The car costs $70,000 over a 4-year novated lease.

If you are providing this salary sacrifice arrangement for your employees, an adjustment will need to be made to the wages being paid to them. You will be able to do this through your payroll software. Cloud Payroll subscribers can contact Cloud Payroll, and the support team will be able to assist.

To find out about salary packaging, please contact your Bongiorno Financial Adviser.