EV Rebates & Incentives

The FBT Exemption Explained

The fringe benefits tax (FBT) exemption is the most valuable EV incentive available to Australian employees. It works through a novated lease: your employer makes lease payments from your pre-tax salary, reducing your taxable income. Normally, a car provided this way would attract FBT - but eligible BEVs are fully exempt.

In practical terms, you pay for the car with pre-tax dollars. The effective saving depends on your marginal tax rate:

• 30% bracket ($45,001–$135,000): Pre-tax payments cost roughly 30% less than paying post-tax (32% with the Medicare levy)
• 37% bracket ($135,001–$190,000): Effective saving of 37% on each lease payment (39% with the Medicare levy)
• 45% bracket (over $190,000): Effective saving of 45% on each lease payment (47% with the Medicare levy)

To make this concrete: on a $50,000 EV with a three-year novated lease at $1,100/month, a person in the 37% bracket saves approximately $7,300 in tax over the lease term compared to buying post-tax. For someone in the 45% bracket, the saving approaches $11,000.

The FBT exemption also covers running costs included in the novated lease package - registration, insurance, tyres, and charging - if structured as a fully maintained lease. This extends the pre-tax benefit beyond the vehicle cost itself.

To access the exemption, your employer must offer novated leasing. Most medium-to-large employers do through specialist providers such as SG Fleet, Fleetpartners, or Maxxia. If your employer doesn’t currently offer it, they can set it up - there’s no cost to the employer to administer the arrangement.

The exemption covers BEVs and hydrogen fuel cell vehicles priced below the luxury car tax threshold ($91,661 for 2026-27). PHEVs lost eligibility from 1 April 2025.

State Stamp Duty Exemptions and Registration Discounts

State incentives vary considerably. Below is the current position across each jurisdiction:

Most states have wound their EV concessions back. NSW closed both its rebate and its stamp duty exemption on 1 January 2024, so NSW EVs now pay standard duty. Queensland retains a concessional 2% registration duty band, Victoria a concessional green car duty rate, and the NT waives duty on the first $50,000 of value until 30 June 2027. The ACT, once the standout, now charges the lowest emissions-based band after its exemption closed in September 2025.

These state concessions stack with the FBT exemption. An NT-based buyer purchasing a $50,000 BYD Atto 3 on a novated lease could access: the FBT exemption (the dominant saving), no stamp duty under the NT concession, and free registration until 30 June 2027 - with the federal exemption doing most of the work before the fuel saving calculation begins.

Novated Lease vs Buying Outright

The FBT exemption is only accessible via a novated lease (or a company car arrangement). This raises the question of whether the lease structure itself is worthwhile, or whether buying outright and pocketing the depreciation makes more sense.

Novated leasing wins when:

• You’re in the 37% or 45% tax bracket and your employer offers it
• You include running costs in the lease (maximising pre-tax expenditure)
• You don’t plan to own the vehicle long-term and are comfortable with a residual payment or re-leasing at the end of the term

Buying outright makes more sense when:

• You’re self-employed or your employer doesn’t offer novated leasing (you cannot access the FBT exemption independently)
• You’re in the 16% bracket and the tax saving is modest relative to novated lease management fees ($500–$1,200/year with most providers)
• You plan to own the vehicle for 8–10+ years, where the interest cost embedded in leasing outweighs the tax saving

For most salaried employees in the 37–45% bracket whose employer supports it, the novated lease route delivers the largest total saving. For everyone else, buying outright with cash or a standard car loan and claiming whatever state duty concession applies in your jurisdiction remains straightforward and avoids lease complexity.