As more Australians make the switch to electric vehicles (EVs), novated leasing continues to grow in popularity as a tax-effective way to finance these eco-friendly cars. But with this shift comes an important question: How do you claim EV charging costs under a novated lease?
Here’s what you need to know to stay compliant and make the most of your entitlements.
A novated lease is a three-way agreement between you, your employer, and a finance provider that allows you to lease a vehicle using pre-tax income. When you opt for an EV, there are additional savings thanks to fringe benefits tax (FBT) exemptions introduced for eligible electric vehicles.
Yes — but it depends on the charging method and where the charging occurs.
There are two main categories:
If you charge your EV at home, claiming expenses can be more complex because electricity is typically bundled with your household usage. The ATO allows for two approaches:
Fixed rate method: As of the 2023–24 financial year, the ATO allows a fixed rate of 4.2 cents per kilometre travelled for home-charged EVs.
Actual cost method: Requires detailed records, including electricity bills, odometer readings, and possibly a smart charger with usage tracking.
Public charging costs are more straightforward to claim:
Retain tax invoices and receipts.
These can be submitted as part of your novated lease’s running costs.
To use either method effectively, you’ll need:
A valid logbook showing business vs personal kilometres.
Odometer readings at the start and end of each FBT or financial year.
Evidence of charging at home (utility bills, charger output, etc.).
Under a novated lease, eligible EV charging expenses may be included as part of your running costs, similar to fuel for petrol vehicles. These include:
✅ Public EV charging.
✅ Smart home charger installation (potentially depreciable).
✅ Charging cable replacement.
❌ Home electricity costs without substantiation.
Your leasing provider can assist in categorising these correctly.
The ATO is increasingly scrutinising EV-related claims, so documentation is essential. Keep:
A logbook (minimum 12 continuous weeks).
Charging records (dates, distances, amounts).
Receipts or digital payment history from public stations.
To optimise your novated lease:
Choose an EV under the luxury car tax (LCT) threshold to maintain FBT exemptions.
Track all EV-related expenses accurately.
Consider speaking with a tax adviser or novated lease specialist (like Prosperity Smart Drive) to ensure compliance and savings.
EV charging claims via a novated lease may seem like uncharted territory, but with the right strategy, you can minimise your tax and make the most of your green investment. As EV adoption accelerates, expect more guidance and streamlined systems — but for now, the “nitty gritty” is in the detail.
Whether you’re looking to maximise tax savings, simplify your car expenses, or switch to an EV, Prosperity Smart Drive can help you find the right novated lease solution.