EV FBT Exemption
Australian novated lease guide and comparison.
Last verified: 2025-07-01 | 2025-26 tax rates
EV FBT Exemption
Electric vehicles and plug-in hybrids under $91,387 are exempt from Fringe Benefits Tax until 31 March 2027. This saves thousands per year on a novated lease.
Which cars qualify?
To qualify for the FBT exemption, a car must be:
- A battery electric vehicle (BEV), plug-in hybrid (PHEV), or hydrogen fuel cell vehicle
- Priced at or below the luxury car tax threshold for fuel-efficient vehicles ($91,387 for 2025-26)
- First held and used on or after 1 July 2022
The exemption applies to the entire FBT liability on the car -- not just a reduction, but a complete exemption.
How much does the FBT exemption save?
On a $50,000 car, the FBT (using the statutory method) would be approximately $9,776.94 per year. Over a 3-year lease, that's $29,330.82 in FBT savings alone -- on top of the GST and income tax savings.
When does it end?
The FBT exemption for eligible EVs is legislated until 31 March 2027. The government has not announced an extension, so if you are considering a novated lease on an EV, acting before this date is recommended.
FBT-Exempt Cars
| Car | Type | Price | FBT saved/yr |
|---|---|---|---|
| BYD Dolphin | EV | $35,888.00 | $7,017.50 |
| GWM Ora | EV | $35,990.00 | $7,037.44 |
| MG ZS EV | EV | $36,990.00 | $7,232.98 |
| MG 4 EV | EV | $38,990.00 | $7,624.06 |
| BYD Atto 3 | EV | $44,381.00 | $8,678.21 |
| Hyundai Kona Electric | EV | $45,500.00 | $8,897.02 |
| Volvo EX30 | EV | $48,490.00 | $9,481.68 |
| BYD Seal | EV | $49,888.00 | $9,755.04 |
| Kia Niro EV | EV | $49,990.00 | $9,774.98 |
| Cupra Born | EV | $49,990.00 | $9,774.98 |
| Tesla Model 3 | EV | $54,900.00 | $10,735.08 |
| Mitsubishi Outlander PHEV | PHEV | $56,490.00 | $11,045.99 |
| Hyundai Ioniq 5 | EV | $56,900.00 | $11,126.16 |
| Hyundai Ioniq 6 | EV | $56,900.00 | $11,126.16 |
| Kia EV6 | EV | $58,750.00 | $11,487.90 |
| Tesla Model Y | EV | $58,900.00 | $11,517.24 |
| BYD Shark 6 | PHEV | $59,990.00 | $11,730.37 |
| Polestar 2 | EV | $59,990.00 | $11,730.37 |
| Volvo XC40 Recharge | EV | $62,990.00 | $12,316.99 |
| BYD Tang | EV | $72,998.00 | $14,273.94 |
| Kia EV9 | EV | $86,750.00 | $16,962.99 |
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Frequently Asked Questions
What is a novated lease?
A novated lease is a three-way agreement between you, your employer, and a finance company. Your employer deducts lease payments from your pre-tax salary, reducing your taxable income.
Are EVs FBT exempt on novated lease?
Yes, EVs and PHEVs under $91,387 are FBT exempt until 31 March 2027, making them significantly cheaper to salary sacrifice than petrol cars.
How much can I save with a novated lease?
Savings depend on your salary and car choice. On an $85K salary with a $45K EV, typical savings are $10,000-$15,000 over 3 years.
What happens at the end of a novated lease?
You can pay the residual value to own the car, refinance the residual, trade in and start a new lease, or hand the car back.
Can I salary sacrifice a used car?
Yes, most novated lease providers allow used cars, typically up to 7 years old at the end of the lease term. New cars generally offer better value due to GST savings.
Calculate Your Exact Savings
Use our novated lease calculator with your specific salary, car, and preferences.
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