Electric vehicle home charging expenses

The Australian Taxation Office (ATO) has introduced a new practical compliance guideline to simplify how taxpayers can account for the electricity costs of charging electric vehicles (EVs) at home, separating these costs from the household's overall electricity usage.

The guideline provides a straightforward method for calculating the electricity costs incurred when an EV is charged at a home, whether it's an employee’s or an individual’s residence. Taxpayers have the option to use a rate of 4.20 cents per kilometer traveled for either fringe benefits tax (FBT) or income tax calculations within a financial year.

Fringe Benefits Tax

Under the new guideline, if an employer provides an employee or an associate with an EV, which results in car, residual, or expense payment benefits, they may opt to use the simplified rate of 4.20 cents per kilometer to determine the taxable value of these benefits.

Income Tax Deductions

For individual taxpayers, this same shortcut method can be utilised to calculate work-related car expenses for income tax purposes, particularly when using the logbook method. For vehicles that do not qualify as cars, taxpayers can still claim deductions by tallying the total kilometers traveled during the income year.

Eligibility and Requirements

To qualify for using this simplified method, taxpayers must keep yearly odometer readings, maintain a logbook, and have at least one electricity bill as proof. This method is entirely optional, and taxpayers can choose to adopt it or revert to standard calculations on an annual basis.