6 Key Points to Consider for Tax 2023

It’s a New Financial Year, which means Tax Time is here again!

Our mission is to optimise your tax position based on the current taxation laws.

We aim to get it right the first time. To avoid ATO scrutiny, we don’t do dodgy deductions.

We don’t make the laws but we do help you stay within them. We ask you to be prepared with your deductions and income so we can make an accurate calculation of your tax position.

Below are key points to help you stay on the right side of the ATO.

6 Key Points to Consider for Tax 2023

    1. WAIT – ATO is urging individuals to wait until late July to lodge 2023 tax to avoid mistakes and missed information. You must wait until your Income Statement is TAX READY – You can find your Income Statements via MyGov to check if they are Tax Ready.

    1. DUE DATE – if you are up to date and received a refund in FY22, your due date will be 15 May 2024. So you have plenty of time.

    1. WORK FROM HOME (WFH) DEDUCTION CHANGES: Now that COVID has passed ATO have changed the way you claim WFH.

    1. ATO DATA MATCHING RAMPS UP: ATO are now using big data sets to check your returns. Their main focus is on:
        • RENTAL PROPERTY LOANS: ATO will have transaction level data on loans so they can check interest and if you are using the loan for private purposes. We will be requesting full loan statements for Tax 23 to pre-check this before we lodge

        • GIG ECONOMY – Airbnb, Uber, Airtasker, Fivrr, OnlyFans etc. ATO are getting intel on all of these types of income.

        • ASSET SALES – Capital Gains Tax – ATO continue to track this

    1. REFUNDS SHRINK – ATO removed the Low and Middle Income Tax Offset (LMITO). This will mean your refund will be up to $1,500 smaller depending on your income level.

    1. ATO FOCUS AREAS – ATO have announced 3 key focus areas for Tax 2023.
        • Rental Property Deductions

        • Work Related Expenses

        • Capital Gains Tax


No need to rush to get tax 2023 done. We know people are keen to get their refund BUT rushing to lodge early often leads to mistakes being found by ATO later on.

ATO gather a massive amount of data such as: employment income, bank interest, private health details, share dividends, capital gains, managed fund income etc. This can take a month or more to flow through so the more complex your return, the longer you should wait.

Managed funds are usually the biggest hold up. You will need to wait until October before that information flows though.


Lodging with a registered Tax Agent, like us, affords you a longer time frame to lodge your tax.

Lodgement Due Date Description
31 October 2023 – Tax return for all individuals where one or more prior year tax returns were outstanding as at 30 June 2023.
– Also those who self-lodge
31 March 2024 Tax return for individuals whose latest return resulted in a tax liability of $20,000 or more
15 May 2024 Tax returns for all remaining individuals and trusts not required earlier (Most People)
Individual Tax Lodgement Dates – ref ATO


The fixed rate method for calculating your deduction for working from home expenses has been revised. This revised method is available from 1 July 2022.

The fixed rate method has been revised to:

    • increase the rate per work hour that you can claim when you work from home

    • change the expenses the rate covers

    • change the records you need to keep

    • remove the requirement to have a home office set aside for work.

If you don’t use the revised fixed rate method, you need to use the actual costs method to claim a deduction for the additional expenses you incur as a result of working from home.


Eligibility to claim

To use the revised fixed rate method, you must:

    • have a record of the total number of hours you work from home and the expenses you incur while working at home

    • have records for expenses the fixed rate per work hour doesn’t cover and that show the work-related portion of those expenses.

How it works

You can claim 67c for each hour you work from home during the relevant income year. The rate includes the additional running expenses you incur for:

    • home and mobile internet or data expenses

    • mobile and home phone usage expenses

    • electricity and gas (energy expenses) for heating, cooling and lighting

    • stationery and computer consumables, such as printer ink and paper.

The rate per work hour (67c) includes the total deductible expenses for the above additional running expenses. If you’re using this method, you can’t claim an additional separate deduction for these expenses.

More detailed info on the ATO website here

How to claim expenses the fixed rate doesn’t include

You can separately claim a deduction for the work-related use of technology and office furniture such as chairs, desks, computers, bookshelves. These are generally depreciating assets that decline in value over time. You can also claim the repairs and maintenance of these items.

If the item cost $300 or less and you use it mainly for a work-related purpose, you can claim an immediate deduction for the cost in the year you buy it. This may include items, such as keyboards, computer mouses, power boards, desk lamps and chargers.

You can claim a deduction for the decline in value of depreciating assets over the effective life of the item, if it either:

    • cost more than $300

    • forms part of a set that together cost more than $300.

You may choose to work out the decline in value of low-cost assets and low-value assets with a cost or opening adjustable value of less than $1,000 through a low-value pool. You calculate decline in value of depreciating assets in a low-value pool using a diminishing value rate.

Where you use your depreciating assets for both work and private purposes, you need to apportion your decline in value deduction. You can only claim the work-related portion as a deduction.

We can no longer use the COVID Shortcut Method. That finished as at 30 June 2022.

4. ATO DATA MATCHING – Big Brother is Watching

The Australian Taxation Office (ATO) has announced that it is expanding it’s data matching program. ATO has been using 3rd party data for many years for things like employment income and interest earnings.

ATO are now expanding their data matching into the following areas:

    • rental property deductions

    • sharing economy income

    • cryptocurrency transactions

    • Income protection insurance premiums

ATO assistant commissioner Tim Loh said the expanded capabilities will leave the Tax Office clear on which individuals are being genuine and which are trying to get away with providing fallacious data. 

“This isn’t a game of Guess Who, as our sophisticated data matching programs provide us with all the clues we need to track down taxpayers with incorrect information in their tax return,” said Mr Loh. 

“We will use this information to identify and educate taxpayers who have made incorrect claims in their return, with a longer-term plan to pre-fill as much information as possible in future years.” 

The ATO said while nine in 10 rental property owners were getting their returns wrong, the additional data matching capability of investment loan data and landlord insurance policy information should see a marked improvement. 

ATO will get transaction level investment loan statement data. This will allow them to not only add up the interest deduction but also see any personal loan redraws that would reduce the deductibility of any interest. You can’t redraw to buy a car and keep claiming 100% of the interest.

ATO Assistant Commissioner Tim Loh said the ATO is continuing to prioritise areas where we often see mistakes being made.


The Federal Government and ATO have removed a tax offset that previously boosted tax refunds. The Low and Middle Income Tax Offset (LMITO) has been discontinued so your refund could be up to $1500 worse off if your tax situation is exactly the same as the previous year. You may even end up with a tax bill.

Your tax return outcome may change for any of the following reasons:

    • A tax offset you received previously is no longer available or you are no longer eligible for an offset – for example, the low and middle income tax offset ended on 30 June 2022.

    • Your income or deductions for the income year are different from previous income years.

    • We find a difference between the details in your tax return and the information we receive through pre-fill data or our data matching program.

    • You have not advised your employer of your study or training support loan and your income is above the minimum repayment threshold and you have a compulsory repayment amount.

Some debts will not be applied to your tax return until after it is lodged. This means your tax estimate in may not match your final tax outcome. We do endeavour to check this before we lodge.

If you believe you will get a tax bill, it’s still important to lodge your tax return on time even if you can’t pay immediately. You can negotiate a payment plan with ATO to repay unexpected tax debts over a year or two.

To understand why you owe tax, see why you may receive a tax bill.


The ATO have announced 3 key focus areas for tax time 2023:

    • Rental Property Deductions

    • Work Related Expenses: Avoid the “Copy & Paste”

    • Capital Gains Tax

Rental Property Deductions

The ATO’s review of income tax returns show 9 in 10 rental property owners are getting their return wrong, and often sees rental income being left out, or mistakes being made with property related deductions – like overclaiming expenses or claiming for improvements to private properties.

The ATO is particularly focused on interest expenses and ensuring rental property owners understand how to correctly apportion loan interest expenses where part of the loan was used for private purposes (or the loan was re-financed with some private purpose).

‘You can only claim interest on a loan used to purchase a rental property to earn rental income – don’t forget, if your loan also includes a private expense, such as for a new car or a trip to Bali, you can only claim an interest deduction for the portion relating to producing your rental income,’ Mr Loh said.

The ATO has sophisticated data matching capabilities which include rental property-related data and has recently implemented a new residential investment property loans data matching program.

‘This is just one example of the work we are doing to help you get your return right and make sure people are claiming expenses correctly,’ Mr Loh said.

Work Related Expenses: Avoid the “Copy & Paste”

ATO are cracking down on those who take a “same as last year” approach. Some things will be similar or the same but you need to still cover the 3 basic rules of tax deductions:

    1. You must have spent the money, and not been reimbursed

    1. The item must be related to you earning your income

    1. You must have records to prove the expense was incurred (a receipt or invoice)

Tim Loh, from ATO said ‘We continue to see shifts in the way Aussies are working, and it’s important to consider whether your claims reflect your working arrangements this year.’

‘There have also been some changes in how you calculate things like working from home deductions, so don’t be tempted to just copy and paste your prior year’s claims. We know a lot of people are working back in the office more compared to last year,’ Mr Loh said.

This year, the ATO is particularly focused on ensuring taxpayers understand the changes to the working from home methods and are able to back up their claims.

Capital Gain Tax: Have you considered ALL assets?

Capital gains tax (CGT) comes about when you dispose of a capital asset such as shares, property or cryptocurrency. To meet your tax obligations you need to declare your capital gain or loss in your tax return.

Generally your main residence is CGT exempt, unless you have used it to produce income, such as renting part or all of the house out on Airbnb, Stayz or privately. Accurate records must be kept to apportion the exempt time vs the income producing time.

Want to discuss your tax return needs with our team? Hit BOOK NOW above.

ATO Small Business Technology Boost: A Guide to Deductions

Boost Your Small Business: We explain how to get an extra 20% deduction for your business spend on technology items


  1. You must be a Small Business – ie. turnover less than $50million per year
  2. Eligible Expenses include:
    • Computer hardware
    • e-commerce services and subscriptions such as cloud based services
    • cyber security services
  3. TIMING – must incure the costs between 7:30 pm AEDT 29 March 2022 and 30 June 2023.
  4. GET ADVICE: Contact your Accountant now to discuss before the timeframe expires.
  5. EXAMPLE: Scroll down to see a worked example




In today’s fast-paced digital era, small businesses need to stay competitive by embracing technology. The Federal Government has finally approved legislation to enact the Small Business Technology Investment Boost, provided by the Australian Taxation Office (ATO).

In this blog post, we’ll explore how this program can benefit your small business and how to leverage it to maximize deductions.

Understanding the Small Business Technology Investment Boost:

The Small Business Technology Investment Boost is an Australian government program aimed at encouraging small businesses to invest in technology. It offers an extra 20% tax deduction for eligible assets purchased and installed within the specified timeframe. By leveraging this boost, small businesses can enhance their operations, improve productivity, and gain a competitive edge.

Eligibility Criteria:

To qualify for the Small Business Technology Investment Boost, your business must meet the following criteria:

  1. SMALL BUSIENSS – your business must have an aggregated annual turnover of less than $50 million
  2. EXPENSE – Must already be a deductible expense for your business under taxation law
  3. ELIGIBLE EXPENSE – Must be for business items
    • digital enabling items – computer and telecommunications hardware and equipment, software, internet costs, systems and services that form and facilitate the use of computer networks
    • digital media and marketing – audio and visual content that can be created, accessed, stored or viewed on digital devices, including web page design, video, podcasts etc.
    • e-commerce – goods or services supporting digitally ordered or platform-enabled online transactions, portable payment devices, digital inventory management, subscriptions to cloud-based services, and advice on digital operations or digitising operations, such as advice about digital tools to support business continuity and growth
    • cyber security – cyber security systems, backup management and monitoring services.
  4. TIMING – Eligible expenses must be incurred between 7:30 pm AEDT 29 March 2022 and 30 June 2023.


You will note that this law is retrospective, covering expenses from 7:30 pm AEDT 29 March 2022 to 30 June 2023 despite only being legislated on 22 June 2023.

This means you will need to trawl back through past spending to capture eligible expenses

Qualifying Assets:

The program covers a wide range of technology assets that can help improve your business processes. Some examples of eligible assets include computer hardware, software, printers, scanners, and digital tools. It’s essential to ensure that the assets you plan to invest in align with the ATO’s guidelines to claim the tax deductions successfully.

Claiming Deductions:

To claim deductions under the Small Business Technology Investment Boost, you must adhere to the ATO’s instructions and guidelines. It is important to keep proper records of your technology investments, including invoices, receipts, and any relevant documentation. Your tax advisor can provide detailed guidance on how to correctly claim these deductions and maximize your tax benefits.

IMPORTANT NOTE: All eligible spends are claimed in the 2023 business tax return despite teh time frame stretching back 3 months into the 2022 income tax year (29 Mar 22 – 30 June 22).

Example of the Small Business Technology Investment Boost:

Let’s consider an example to illustrate how the Small Business Technology Investment Boost can benefit your business.

Suppose you own a small graphic design agency with an aggregated annual turnover of $30 million. You are a small business ✅

In November 2022, to keep up with the latest design software and hardware, you invested $20,000 in new computers, graphic tablets, and design software licenses.

  • These items are normal deductions to your business ✅
  • This is also within the time frame for eligibility ✅
  • These are eligible digital enabling items ✅

This spend would normally be a 100% tax deduction assuming no private usage of these items.

By taking advantage of the Small Business Technology Investment Boost, you can claim an EXTRA 20% tax deduction in your business tax return. $20,000 x 20% = $4000.

This deduction can significantly reduce your taxable income, resulting in lower tax obligations and more funds available for further business growth.

Assuming you operate a company structure you would save $4000 x 25% company tax rate = $1000.00


The Small Business Technology Investment Boost offered by the Australian Taxation Office presents a valuable opportunity for small businesses to invest in technology and improve their operations. By understanding the eligibility criteria, investing in qualifying assets, and correctly claiming deductions, small businesses can leverage this program to maximize their tax benefits. Be sure to consult with a tax advisor to ensure compliance with all the necessary requirements. Embrace the power of technology and propel your small business towards success in today’s competitive landscape.

Division 293 Tax Explained in Simple Terms

What is Division 293?

The Division 293 tax in Australia is a tax rule that targets higher-income earners by applying an additional tax rate on their superannuation contributions. It aims to make the tax treatment of superannuation fairer and ensure that high-income individuals receive the same concessional tax treatment as lower-income earners.

Who Does It Apply To?

The Division 293 tax is applicable to individuals whose combined income (including taxable income and concessional superannuation contributions) exceeds a certain threshold.

For the 2022-2023 financial year, the threshold is set at $250,000.

To calculate the Division 293 tax, you need to determine the excess amount above the threshold and apply a 15% tax rate to that excess.

ATO assess you for Division 293 once you have lodged your Individual Tax Return AND your superfund(s) have lodged their returns confirming your contributions.

How to Pay?

Division 293 Assessments are issued to you as an individual. As Div293 imposes an extra 15% tax on some or all of your super contributions for a given year. 

There are 2 ways to pay:

– from your own money; or 

– by releasing money from your super

We recommend releasing money from super as the funds being taxed are sitting in super.


Let’s take the example of someone earning $240,000 with $19,000 in super contributions in the same year.

Step 1: Calculate the combined income

Combined income = Taxable income + Concessional superannuation contributions
In this example, the taxable income is $240,000 and the concessional superannuation contributions are $19,000.

Combined income = $240,000 + $19,000 = $259,000

Step 2: Determine the excess amount above the threshold

Excess amount = Combined income – Threshold
In this example, the threshold is $250,000.

Excess amount = $259,000 – $250,000 = $9,000

Step 3: Calculate the Division 293 tax

Division 293 tax = Excess amount × 15%
Division 293 tax = $9,000 × 0.15 = $1,350

So, in this scenario, an individual earning $240,000 with $19,000 in super contributions would be liable for a Division 293 tax of $1,350.

Division 293 assessments are issued to the individual in a similar way to a regular Notice of Assessment. The assessment will come via myGov or via mail. You need to deal with this straight away.

We recommend following the instructions to have money released from super to pay the assessment before the due date.

DISCLAIMER: It’s important to note that this is a simplified example and actual tax calculations may involve other factors and deductions. It’s advisable to consult with a qualified tax professional or the Australian Taxation Office (ATO) for accurate and personalized tax advice.

Link your myGov account to the ATO

By linking your myGov account to the ATO, you can now manage your tax and super affairs whenever it suits you.

In ATO online services you can

  • check the progress of your income tax return as well as
  • download your Notice of Assessment,
  • update your personal details,
  • keep track of your super and
  • arrange to pay a debt.

For details on how to connect MyGov to ATO, visit


How to create a myGov account and link to ATO

If you’re an individual or sole trader, you can manage your tax and super online.

To do this, you will need a myGov account linked to the ATO. To get started, you should have the following.

  • A myGov account using SMS,
  • myGovID or
  • the myGov code generator app as your sign in option,
  • your tax file number TFN.

And two of the following.

  • A notice of assessment received in the last five years.
  • A PAYG Payment Summary received in the last two years.
  • A super account statement from the last five years.
  • A dividends statement from the last two years.
  • A Centrelink payment summary from the last two years.
  • Or your bank account details. This must be an account you had your income tax return refund paid into last year or has earned interest in the last two years.

If you don’t have this information available, you will need to phone the ATO and get a unique linking code to complete this process.

Once you have this information ready, visit my.gov.au and sign in to your account.

When signed in, go to the linked services section and select view and link services. In the link a service section, select the link button to the right of Australian Taxation Office.

When you link the ATO, myGov will store your name and date of birth in your profile. If you already have a profile, these details must match, read and agree to the ATO terms and conditions. Provide your details, including your tax file, number, name, date of birth and address.

If your details have changed since you last dealt with the ATO, you will need to phone to update them before you can complete the link. Enter information carefully and accurately so that it will match your details held by the ATO.

You will also need to answer two questions from information contained in documents mentioned earlier. If you receive an error message at any time, take note of the error code and follow the link or instructions for more information. Once you’ve finished answering these questions, you’re done.

You have successfully linked your myGov account to your ATO record and that’s it. You can now manage your tax and super affairs through ATO online.


⚡Do you want a 100% tax deductible car? ⚡

ATO FBT Exemption for Electric Vehicles Explained

We break it down to explain what fringe benefits tax is, who can get the exemption, and why the Electric Vehicle (EV) exemption is such a good deal.

Federal and State Governments in Australia are now offering incentives to encourage the uptake of zero-emission vehicles. The Federal FBT Exemption is the biggest incentive available at the time of writing this. This can give you roughly a 40% discount.

Did you know you can now get a Tesla for less than a Toyota Corolla?

You need satisfy 3 main elements to qualify:

  1. You must be an employee or an associate of an employee
  2. Select an EV that qualifies by price and first use date
  3. Have your Employer provide the EV to you as a Fringe Benefit –
    • commonly organised via a Novated Lease for employees
    • small business owners – speak to your accountant


Assuming you have satisfied the above points you can:

  1. Save TAX – by having the cost of the car come out of your pre-tax income, regardless of your work usage of the vehicle.
  2. Avoid paying for fuel into the future and the stress of fuel price fluctuations.
  3. Save GST
  4. Get a $67,000 EV for less than a $36,000 Internal Combustion Engine (ICE) car. See our example below
  5. Potentially get State Government incentives that waive or reduce stamp duty – check your state rebates below:
  6. Environmental impacts are reduced:
    1. NO fossil fuel is burnt to propel the car
    2. Mining, transport and refining of fuel is not required
    3. No fine particle emissions from exhaust fumes

Common Concerns with EVs

Humans are creatures of habit. Any change comes with concerns but we have found that the benefits of EV adoption far outweigh any concerns people may have.

  1. Where do I charge? Most people plug into a regular power point at home. This adds about 120km of range over night via a regular 10 amp power point. You can get faster charging setups at home if required.
  2. How far does the car go on one charge? Most new EVs have a range of 300 – 500km on a full battery, depending on the make and model and size of the battery. Tesla Model Y RWD has a range of 432km for example with a 60Kwh battery. Similar to a tank of fuel.
  3. EVs Cost Too Much. We agree they are expensive upfront. This is why the FBT exemption is so good. This reduces the total cost of ownership by around 40%. Like all new technologies they start out very expensive and reduce in cost over time. Like flat screen TVs did a decade ago.
  4. There are not many EVs Available: True, for now – there are about 14 Battery EVs available in Australia in Feb 2023 in the $40k to $80k price range that will be possible to acquire with FBT Exemption. Vehicle manufacturers are ramping up their range so many more will be available in the coming years.
  5. Can I go on road trips? Yes! Absolutely. There is an extensive network of fast chargers around Australia. Fast chargers can add 80% battery charge in under 15 minutes. Tesla is opening it’s industry leading supercharger network to non-Tesla EVs as well.
  6. Can I Tow?: Yes but this will reduce range just like it will in an ICE vehicle. There are some bigger towing vehicles coming but they are likely to be more expensive than the LCT limit.
  7. Won’t the battery die in a few years? No. New battery technology allows for 10,000 charging cycles. So batteries will likely outlast the vehicle itself.

We have staff who have already taken advantage of this amazing deal so we have real world experience. If you are interested please read the details below.

DISCLAIMER: Please note that the financial examples provided on this page is for illustrative purposes only and should not be construed as financial advice. The figures and calculations used may not be accurate or applicable to your specific financial situation. It is important to seek professional financial advice before making any investment decisions. The author and publisher of this example shall not be held liable for any damages or losses incurred as a result of using the information provided.

Electric Vehicle Charging Image

What is a Fringe Benefit?

FBT, or Fringe Benefits Tax, is a tax system in Australia that applies to non-cash benefits provided to employees or their associates as part of their employment. These benefits can include things like company cars, health insurance, and expense accounts, among others.

FBT is an important part of the Australian tax system, as it helps to ensure that employees are not receiving excessive tax benefits through their employment arrangements. It also helps to maintain fairness in the tax system, by ensuring that all employees are subject to similar tax obligations regardless of their employment arrangements.

When an employer provides a fringe benefit to an employee, they are typically required to pay FBT of 47% on the taxable value of the benefit. However, if the employee makes an employee contribution towards the cost of the benefit, this can reduce the taxable value of the benefit and therefore reduce the amount of FBT that the employer is required to pay.

For example, if an employer provides an employee with a company car, they may be required to pay FBT on the value of the car. However, most workplaces require employee to make an employee contribution towards the cost of the car to eliminate any FBT that the employer may have been required to pay.

How Does This Apply To Electric Vehicles?

Like everything relating to tax, it is a bit complicated.

To get an EV as an FBT Exemption you must meet ALL of the following criteria:

  1.  ✅The vehicle must be zero or low emissions.
  2.  ✅The first time the vehicle was held and used by ANYONE must be after 01 July 2022
  3.  ✅The car is used by an employee or their associate (ie family members)
  4.  ✅Luxury Car Tax (LCT) has never been payable on the importation of the vehicle.

We quickly expand these points below

1- What is a Zero or Low Emission Car?

Good question. Also complicated.

ATO defines Zero and Low Emission cars this as follows:

  1. It is a:
    • Battery Electric Vehicle (BEV)
    • hydrogen fuel cell electric vehicle, or
    • Plug-In Hybrid Electric Vehicle (PHEV)
      • MUST BE PLUG IN – not just a “hybrid” that charges off the petrol engine.
      • Plug-in Hybrid exemptions EXPIRE 31 March 2025.
  2. It is a car designed to carry a load of less than 1 tonne and fewer than 9 passengers (including the driver). Above 1 tonne and/or 9+ passengers are Non Cars and no FBT Exemption applies.

Motorcycles and scooters are not cars for FBT purposes and do not qualify for the exemption, even if they are electric.

2 – First Used after 1st July 2022

Basically the vehicle must have been first purchased NEW on or after 1 July 2022.

This means the exemption would NOT apply to the purchase of a 2nd hand vehicle that was first used before 1 July 2022.

So to be clear here are 2 quick examples:

  1. Buy a used 2019 Tesla Model 3 in December 2022. This car was first registered and used in 2019 – FBT Exemption DOES NOT apply – as first use was before 1/7/22.
  2. Buy a used 2022 BYD Atto 3 in Feb 2023. This car was first used in October 2022. You can get the FBT Exemption on this vehicle as it was first used AFTER 1/7/22.

3 – Car Must Be Used by an EMPLOYEE or Their Associates

This is important.

There must be an Employer – Employee relationship in order for a Fringe Benefit to arise.

The exemption only applies during the employment relationship. I does not apply before or after an employment arrangement is active.

SOLE TRADERS do not qualify as they are NOT employees.

Quick definitions:

Employer = The entity with which an employee has a contract to provide their labour. Written or otherwise. Usually a company or trust which would provide the employee with a payslip, super etc.

Employee = A human who has agreed to work for an entity. Self employed people are included here AS LONG AS they are an employee of their own company or trust.

Sole Trader = Human who has an ABN and works for themselves, issuing invoices for work. Not on payroll. Can’t provide a Fringe Benefit as there is no employee/employer relationship.

4 – Below Luxury Car Tax (LCT) Limit

To be eligible for the FBT Exemption, the value of the car MUST have been below the LCT threshold for fuel efficient vehicles:

  • at the time it was a new vehicle,
  • AND in any subsequent sale

If you buy a 2nd hand EV you will need to get confirmation that it was NOT subject to LCT at any time in the past.

You can check the LCT Threshold for Fuel Efficient Vehicles on the ATO website here

CONFUSED? Use our Flowchart to help understand

You Think You Qualify – Now What?

Small Business Owners – If you use a company or trust structure and pay yourself or family wages, talk to us or your Accountant, to confirm that you qualify.

For employees – speak to your HR department or your boss to confirm that you are able to salary sacrifice a novated lease. Then contact the novated lease provider to organise the car.

Sole Traders – sorry, you don’t qualify. FBT does not come into it for you. Your vehicle tax deductibility is assessed by logbook business use percentage.

Example: Comparison of Novated Lease for Electric Vehicles

Electric Vehicle (EV) vs Internal Combustion Engine (ICE) vehicles.

Mr Wood is looking for a new car. He has rounded it down to 2 of the top selling vehicles in Australia in 2022.

Mr Wood’s circumstances are as follows:

  1. Self employed on wages
  2. Full time earning around $100,000 gross per year
  3. Employer agrees to salary sacrificing a novated lease
  4. Has had the same job for 2+ years and has a mortgage on a home for 2+ years as well – banks and novated lease companies want to see this most of the time.
  5. Both cars are new purchases AFTER 1 July 2022
  6. Both cars are under the Luxury Car Tax (LCT) limit – $89,332 for fuel efficient EVs or $76,950 for other vehicles in FY 2024.
  7. Running costs to be part of the packaged repayments.
  8. Employer or novated lease company will reimburse the costs of charging at home as an expense claim. Subject to negotiations.

Toyota CorollaTesla Model 3
Driveaway Price – estimated at Feb 2023$36,500$67,485
Est. Running Costs – rego, ins, fuel/power, repairs$5,500$4,500
Est. Loan repayments – 60mths, no residual @8%$8,881$12,348
Total Estimated Running Costs Per YEAR$14,381$16,848
——–ANNUAL PAY AFFECT for Salary Sacrifice——–
Employee Taxable Income$100,000$100,000
Less: Pre Tax Deduction($6,716)($16,848)
New Taxable Income$93,294$83,152
INCOME TAX WITHELD($22,650)($19,154)
Less: Post Tax Deduction – Statutory Method ($7665)($0)
Net Income to Bank – per year$62,969$63,998
EV vs ICE Novated Lease example


The above example, using real world numbers, shows that you can get a relatively expensive EV for less than an ICE vehicles despite the drive away price being so different.

Before considering an EV, Mr Wood was earning $100,000 gross income, less $25,000 tax withheld, resulting in him receiving $75,000 into the bank after tax.

Tesla – After pre-tax deductions and tax the income to bank for Mr Wood is $63,998. So compared to the $75,000 above, the Tesla option costs $11,002 out of pocket per year.

This car would have cost him $16,848 after tax had he not salary packaged. $5846 saved per year. This would reduce the cost of the car by more than $29,000 over 5 years. A massive 40%+ saving on the original price of the vehicle.

Corolla – After pre-tax deductions and tax the income to bank for Mr Wood is $62,969. So compared to the $75,000 above, the Corolla costs Mr Wood $12,031 per year.

This would have cost him $14,381 after tax had he not salary packaged. $2,350 saved per year.

So which one is cheaper? The Tesla. Why? This is due to the FBT Exemption. Mr Wood would have a lower out of pocket cost per year.

This is an example so please do your own calculations or ask an expert to assist you to make a decision.

What Else Do You Need to Know?

  • Your employer still needs to calculate a Reportable Fringe Benefit Amount (RFBA) and report this on your Annual Income Statement to ATO via Single Touch Payroll. You do not pay income tax on this amount, but it does impact income tests for child support, family assistance, HECS, Medicare Levy and some other Government benefits.
  • RFBA for exempt EVs does not impact FBT liability for the employer. It is also not included in:
    • certain non-profit employers – The $17,000 or $30,000 exemption cap
    • for rebatable employers – the $30,000 rebate cap
  • The Government will review this exemption by mid-2027 to consider EV take up and decide if the exemption continues.
  • Installation of an electric vehicle charging station in the home of the employee is NOT FBT Exempt. That is a property fringe benefit to the employee.
  • TESLA REFERRAL BONUS – If you are thinking of ordering a Tesla you can get a discount or referral points by using our referral code. We get referral points and you get a discount. Everyone’s a winner.

ATO have released a Electric Vehicle and FBT FACT SHEET here if you would like to read more.

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DISCLAIMER: Please note that the financial examples provided on this page is for illustrative purposes only and should not be construed as financial advice. The figures and calculations used may not be accurate or applicable to your specific financial situation. It is important to seek professional financial advice before making any investment decisions. The author and publisher of this example shall not be held liable for any damages or losses incurred as a result of using the information provided.