The Nitty Gritty of EV Charging and Novated Leasing

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.

What is a Novated Lease?

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.

Are EV Charging Costs Claimable?

Yes — but it depends on the charging method and where the charging occurs.

There are two main categories:

1. Home Charging

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.

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.).

2. Public Charging

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.