Electric Vehicle Affordability and Uptake Boosted by FBT Exemption on Novated Leases

The popularity of electric vehicles across Queensland and the rest of Australia has grown significantly on the back of the the Federal Government’s Electric Car (EV) Discount that became law in December 2022.

The discount – introduced to boost uptake of electric vehicles (EVs) and encourage car manufacturers to import and supply more affordable electric models in Australia – exempts Fringe Benefits Tax (FBT) on eligible EVs.

At RemServ, we’re committed to supporting our novated leasing customers to take advantage of the FBT exemptions while minimising their environmental impact.

Government EV Incentive Under Review

We also work closely with industry partners to make sure our customers are kept informed on EV government incentives. We’ve seen Luxury Car Tax (LCT) threshold increases, the removal of plug-in hybrid vehicles (PHEVs) from FBT exemptions, and now, in 2026, a review by the Federal Government of the EV Discount.

The review runs from 6 February 2026 and due to report by mid 2027, but a decision on whether it will continue or be ceased, or altered from its current form, can be made at any time during this timeframe.

Discover more about the EV Discount review here.

Electric Vehicle Discount Detail

The EV Discount applies to eligible zero-emission vehicles that are held and used on or after 1 July 2022.

It includes an exemption to paying fringe benefits tax (FBT) on eligible EVs that fall below the luxury car tax threshold of $91,387.

These include battery electric vehicles and hydrogen fuel cell electric vehicles, as long as the vehicle is first held and used from 1 July 2022. Plug-in hybrid electric vehicles (PHEVs) became ineligible for the FBT exemption from 1 April 2025.

The FBT exemption only applies to the personal use of electric cars operated by businesses – or financed under a novated lease. Because there is no post-tax component to deductions, a novated lease on an EV differs from that of an Internal Combustion Engine (ICE) Vehicle.

Separately, the Government also removed the 5% import tariff exemption that applied to some imported EVs.

Employers will need to include FBT-exempt electric cars as a reportable fringe benefit on an employee's payment summary. We recommend you seek financial advice on what impact this could have to your personal circumstances, including means-tested government benefits.

How Much Could the Discount Save You?

There are potential FBT savings on EV models costing up to the current $91,387 luxury car tax threshold for eco-friendly vehicles.

It’s also worth noting that electric cars may also be cheaper to run and maintain, making them even more attractive to potential drivers. By way of example, Nissan estimates that a NSW commuter can save $30 a week by switching from a petrol car to its Leaf model.

The discount, alongside the many other benefits of novated leasing, could be a great way to make your money work for you.

One of Queensland’s leading EV-Novated Leasing Providers

RemServ is one of Queensland’s most experienced novated leasing providers, servicing thousands of employees each year from organisations across the Sunshine State.

With decades of experience, we know all about novated leasing and the potential benefits of salary packaging a car. The adoption of EVs has evolved quickly, and we remain committed to our vision of being the partner of choice in supporting customers’ transition to greener vehicles.

Have you considered an EV for your next car? Give us a call on 1300 303 940 and put our expertise to the test.

We’ll Keep You Informed

At RemServ we believe EV educational information is important. We will continue to work with industry groups such as NALSPA (National Automotive Leasing and Salary Packaging Association) and the Electric Vehicle Council, the national body for the electric vehicle industry in Australia, to provide you with the latest EV updates, including those from the Federal Government’s National EV Strategy.

We hope to provide further updates relating to claiming on home-charging very soon.

If you’d like to know more about the ins and outs of electric vehicles, how novated leasing works with an EV and any other commonly asked questions, check out our website here.

* Sourced from TREASURY LAWS AMENDMENT (ELECTRIC CAR DISCOUNT) BILL 2022