Wakefield Business Group

Navigating Fringe Benefits Tax (FBT) for Electric Vehicles in Australia: A Business Guide Leverage Tax Savings While Driving Sustainability Australia’s push toward net-zero emissions has made electric vehicles (EVs) a cornerstone of corporate sustainability strategies. For businesses, the federal government’s FBT exemption for eligible EVs offers significant financial incentives to transition to greener fleets. However, not all EVs qualify, and rules differ for plug-in hybrids (PHEVs). In this blog, we break down the key details using guidance from the ATO’s latest resources (Electric Cars Exemption and FBT on Plug-In Hybrids). What is the FBT Exemption for EVs? The FBT exemption allows employers to provide eligible EVs to employees tax-free, saving businesses thousands in fringe benefits tax. Here’s how it works: Eligibility Criteria To qualify for $0 FBT, the vehicle must meet all of the following: Emission Threshold: Emits <50g CO₂/km (applies to battery EVs and hydrogen fuel cell vehicles). First Use Date: First held and used on or after 1 July 2022. Purchase Price: Must not exceed the Luxury Car Tax (LCT) threshold for fuel-efficient vehicles ($89,332 in 2023–24). Exclusions: Most plug-in hybrids (PHEVs) do not qualify unless they meet the strict <50g/km threshold (rare). Vehicles modified after purchase (e.g., luxury accessories) may exceed the LCT cap, voiding the exemption. EVs vs. Plug-In Hybrids: Key Differences Factor Battery/Hydrogen EVs Plug-In Hybrids (PHEVs) FBT Exemption✅ Exempt if criteria met ❌ Only if <50g/km (unlikely) LCT Threshold $89,332 $76,950 (general vehicles) Running Costs Lower (no fuel) Higher (fuel + electricity) Why Most PHEVs Don’t Qualify: PHEVs combine petrol engines with electric motors, typically emitting >50g CO₂/km when tested. Unless a PHEV meets the sub-50g threshold (e.g., short electric-only range), it will not qualify for the FBT exemption. How Businesses Benefit Savings on FBT Employers avoid the standard 47% FBT rate on the vehicle’s taxable value. Example: Providing a 70,000EVsaves 70,000EVsaves 14,000 in annual FBT compared to a petrol car. Employees can lease EVs via novated leases using pre-tax income, reducing their taxable income. Combines with the FBT exemption for maximum savings. Align with ESG goals and attract eco-conscious talent and clients. Compliance Checklist Verify Eligibility: Confirm the vehicle’s emissions using the Green Vehicle Guide. Ensure the purchase price (incl. GST/dealer fees) is under $89,332. The Future of FBT and EVs Exemption Expiry: The policy currently applies to EVs first used by 31 March 2025, but extensions are possible. Ready to Electrify Your Fleet? Please contact us for tailored advice

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🌟 Keeping Up with Fair Wages in Australia 🌟 As we step into 2024 Financial Year, it's essential to recognize Australia's commitment to ensuring fair compensation through its updated minimum wage rate. 📊 The Update: Effective from July 1, 2024, Australia's national minimum wage stands at $24.10 per hour. This adjustment reflects ongoing evaluations by the Fair Work Commission, considering economic factors and cost-of-living adjustments to maintain equitable pay standards. 🔍 Impact and Significance: This increase not only supports the livelihoods of workers across industries but also strengthens consumer purchasing power, contributing to economic stability and social well-being. It underscores Australia's dedication to balancing economic growth with social responsibility. 🌐 Global Perspective: Australia continues to set a benchmark for global labor standards, emphasizing the importance of fair wages in fostering a productive workforce and reducing income inequality. #MinimumWage #FairPay #EconomicStability #Australia2024 #GlobalLaborStandards

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