18 August 2022
Can I Salary Sacrifice an Electric Car?
New legislation before parliament, if enacted, will make zero or low emission vehicles FBT-free.
Assuming your employer agrees, and the car meets the criteria, salary packaging is an option.
While some FBT concessions are not available if the benefit is provided under a salary sacrifice arrangement, the exemption for electric cars will be available. In order for a salary sacrifice arrangement to be effective for tax purposes, it needs to be agreed, documented, and in place prior to the employee earning the income that they are sacrificing.
Government modelling suggests that for individuals using a salary sacrifice arrangement to pay for a $50,000 electric vehicle, the saving would be up to $4,700 a year.