Putting EV chargers in at work? The tax rules have sharp edges.
The FBT exemption on eligible electric cars is one of the most generous concessions available to Australian business — and it is bounded in ways that catch people out. A luxury car tax test that looks backwards, a date the car must first have been held and used, a plug-in hybrid cut-off that has already passed, and a home charging station the ATO does not treat as a car expense. Get the charger question right and it is straightforward. Assume the exemption covers everything and it is not.
Reviewed by the Mission Green commercial team · Updated August 2026
What the FBT
exemption actually covers.
Generous, and bounded by four conditions that all have to hold.
The ATO states you do not pay FBT if you provide private use of an eligible electric car. To be eligible the car must meet all of the following: it is a zero or low emissions vehicle; the first time it is both held and used is on or after 1 July 2022; it is used by a current employee or their associates; and luxury car tax has never been payable on its importation or sale.
Benefits provided under a salary packaging arrangement are included in the exemption. The private use of an eligible electric car, and the cost of the electricity to charge it, are covered.
Two boundaries worth knowing before anyone builds a business case on this. A car for FBT purposes is one "designed to carry a load of less than one tonne and fewer than 9 passengers" — and the ATO is explicit that motorcycles and scooters are not cars for FBT purposes and do not qualify even when electric. And the LCT test looks at whether luxury car tax has ever been payable, which can catch a second-hand vehicle that was above the threshold when new.
Plug-in hybrids
already stopped qualifying.
If a fleet plan still assumes PHEVs are covered, it is out of date.
The ATO states that from 1 April 2025 a plug-in hybrid electric vehicle is not considered a zero or low emissions vehicle under FBT law and is not eligible for the electric cars exemption. The ATO notes the exemption can continue to be applied in certain conditions, which is a transitional matter to check against your specific arrangements.
This matters for charger planning as much as for vehicle choice. A workplace that specified charging around a PHEV fleet on the assumption the exemption would hold has a different financial picture from one that did not, and the date has already passed.
A charging station
is not a car expense.
This is the single most useful line in the ATO guidance and it is easy to miss.
The electricity
The ATO treats the cost of electricity to charge an eligible electric car as an exempt car expense alongside the private use of the car itself.
The home charging station
The ATO states a home charging station is not a car expense associated with providing a car fringe benefit. It may instead be a property fringe benefit or an expense payment fringe benefit.
Different treatment, different advice
Hardware and energy are not automatically in the same bucket. If you are funding chargers at employees’ homes, that is its own question for your accountant.
The distinction is easy to state and easy to get wrong: the ATO exempts the car and the electricity, and treats a home charging station as something else entirely.
The ATO also notes an otherwise deductible rule may reduce FBT on items that are not exempt car expenses, where the expenditure would have been deductible to the employee had they incurred it themselves. That is a genuine avenue and equally genuinely a question for your accountant rather than your electrician.
What actually
goes on the wall.
The electrical questions are the same ones as anywhere, at a larger scale.
Workplace charging is licensed electrical work, as all fixed EV charger installation in Australia is — there is no exemption that makes it otherwise, and the practical consequences of an unlicensed install are insurance and warranty problems rather than the fine.
The questions that decide the cost are load and supply, not the charger itself. How much spare capacity does your switchboard have once your existing plant is running? Do multiple chargers need load sharing so they do not create a new demand peak? Does the site need a network application for the added load?
That last one is worth taking seriously, because chargers and demand charges interact badly. Several vehicles charging at full rate at 5pm as staff finish is precisely the shape of a new demand peak — and on an annual demand tariff, one such afternoon can set a charge that bills for the following twelve months. Load-managed charging exists largely to prevent exactly this.
So what should
your business actually do?
Short version.
Confirm each vehicle against the four conditions, not the category. Zero or low emissions, first held and used on or after 1 July 2022, used by a current employee, and LCT never payable. A car that fails one fails the exemption.
Treat home chargers as a separate question. The ATO does. Get the treatment confirmed before you commit to funding them.
Model the charging load against your demand tariff before you size anything. Chargers are a large, controllable, schedulable load — which makes them one of the easier things to keep out of your peak window, but only if someone plans for it.
Ask about load management up front. It is usually far cheaper than a supply upgrade, and considerably cheaper than a demand charge you did not expect.
Workplace EV charging:
your questions, answered.
The exemption is on the car, not on the charger. The ATO states you do not pay FBT on private use of an eligible electric car, and that the cost of electricity to charge it is an exempt car expense. A home charging station, however, is not a car expense associated with providing a car fringe benefit and may be a property fringe benefit or an expense payment fringe benefit instead.
The car must be a zero or low emissions vehicle, first held and used on or after 1 July 2022, used by a current employee or their associates, and luxury car tax must never have been payable on its importation or sale. It must also be designed to carry less than one tonne and fewer than nine passengers. Motorcycles and scooters are not cars for FBT purposes and do not qualify even when electric.
No. The ATO states that from 1 April 2025 a plug-in hybrid electric vehicle is not considered a zero or low emissions vehicle under FBT law and is not eligible for the electric cars exemption, though the exemption can continue to apply in certain transitional conditions. Any fleet plan still assuming PHEVs are covered needs rechecking.
The ATO states benefits provided under a salary packaging arrangement are included in the exemption, provided the car itself meets the eligibility conditions.
They can, and it is the main reason to plan them properly. Several vehicles charging at full rate as staff finish for the day is exactly the shape of a new demand peak, and on an annual demand tariff a single such afternoon can set a charge billed for the next twelve months. Load-managed charging exists largely to stop that happening.
No. Fixed EV charger installation is licensed electrical work everywhere in Australia. The real cost of an unlicensed install is not the penalty, it is insurance and warranty exposure. The variables that actually drive the cost are your switchboard capacity, whether load sharing is needed across multiple chargers, and whether the added load requires a network application.
Where these figures come from.
The tax treatment below is quoted from the ATO's own guidance. It is general information about how the rules read, not tax advice for your business — that is a conversation with your accountant.