Australian businesses have been benefitting from the Fringe Benefits Tax (FBT exemptions on Plug-In Hybrid Electric Vehicles (PHEVs), helping reduce their carbon footprint while making significant savings on tax.

But from April 1 2025, PHEVs will no longer qualify for the exemption.

This change will significantly impact fleets with PHEVs. Here's what you need to know about EV FBT and the implications for your fleet.

What Happens to Existing PHEV Leases?

If you already have a PHEV lease, here's what to expect:

• Existing leases stay exempt - If a PHEV novated lease was settled before April 1 2025, the FBT exemption will remain in place until the end of that lease term.
  
• Financially binding commitments remain covered - If your business has a financially binding commitment to continue providing a PHEV to an employee on or after April 1 2025, the exemption still applies.

However, new PHEV leases after this date won't be eligible for EV FBT exemptions.

Key Considerations for Fleet Managers

1. Review existing fleet agreements and leasing options

If employees salary package PHEVs, businesses must review agreements with salary packaging providers to ensure:

• Any new financially binding commitments are clearly identified.
  
• Employers can recover any extra FBT costs from employees.
• Assess the impact of the end of the PHEV FBT exemption on overall fleet tax liabilities.

2. Consider fully electric or hydrogen fuel cell vehicles

With Battery Electric Vehicles (BEVs) and Hydrogen Fuel Cell Vehicles (FCEVs) still FBT-exempt, now is a great time to assess whether transitioning to zero-emission vehicles is a better long-term strategy for EV FBT savings.

Could BEVs offer a better long-term savings? A TCO (Total Cost of Ownership) analysis, which should now include FBT, can help answer this.

3. Explore other EV incentives and rebates

Although PHEV FBT exemptions are ending, businesses should explore other available government incentives for electric vehicles. Stay updated on:

• New EV incentives and policies.
• Potential rebates for at-home charging solutions.

4. Optimise charging and utilisation of PHEV vehicles

One of the biggest risks with PHEVs is drivers relying too much on petrol instead of electric charging, leading to higher fuel costs.

How to prevent this:

• Use charging prioritisation technology to monitor utilisation and ensure vehicles are being charged as they're required.
  
• Educate drivers on best practices to improve battery use and fuel efficiency.

Want more insights on how to manage PHEVs effectively? Watch our recorded webinar on this topic.

5. Automate FBT reporting for compliance and savings

FBT reporting can be time-consuming - but automation can reduce tax liability and improve accuracy.

Smartrak helps fleets automate ATO-compliant FBT reporting using telematics, or pool booking data. Our customers have saved thousands in tax while significantly reducing admin time.

The end of FBT exemptions for PHEVs isn’t a reason to panic—but it is a reason to act now.

By reassessing fleet strategies, optimising vehicle utilisation, and exploring alternative tax-saving opportunities, you can navigate this transition with minimal disruption.

Need expert guidance? Smartrak is here to help you future-proof your fleet and maximise your EV FBT savings. Get in touch today.