🚗 Electric Cars & FBT: Why a “Tax-Exempt” Car Still Shows Up on Your Income Statement

On 15 April 2024, Evita entered into a salary packaging arrangement with her employer, Nuts Pty Ltd. She received a fully maintained electric car valued at $40,000, which was eligible for the FBT exemption.

👉 Sounds like a win, right? No FBT for the employer, and Evita drives away happy.

But here’s the catch…

Even though the electric car was exempt from FBT, Evita still had a “reportable fringe benefits amount” added to her income records.

How it works:

1. Car fringe benefit taxable value = $8,000 (after applying the statutory formula).

2. Since Evita's Individual Fringe Benefits Amount> $2,000, she had a reportable fringe benefits amount.

3. Grossed-up value = $15,094 (that’s $8,000 × 1.8868).

Practical implications:

While Nuts Pty Ltd did not incur an FBT liability, Evita's reportable fringe benefits amount was disclosed for the 2025 FBT year. This disclosure is important because it is used to determine:

- Eligibility for certain tax offsets

- Medicare levy surcharge

- Child support assessments

- Government benefits and concessions

Key message

Employers may benefit from the FBT exemption on eligible electric cars. However, employees must recognise that the reportable fringe benefits amount remains relevant for a range of tax and non-tax obligations.