Electric Vehicle Electricity Costs - how do we calculate?

A fully electric vehicle means no fuel costs however, your electricity at home has probably increased from charging your vehicle.  If your vehicle is salary sacrificed or provided by your employer, you may be wondering “how do we calculate how much the recharge is costing?”

To assist, the ATO has released a draft guideline - Practical Compliance Guideline (PCG) 2023/D1 with a shortcut method to calculate electricity costs for employees charging a zero-emission vehicle at home (i.e. fully electric vehicle).

Using the guideline, an employee calculates the electricity costs incurred by an employee using the following formula:

If you are using a commercial charging station during the year, a choice needs to be made as to which method to use – actual or the ATO charging rate.

There is no FBT payable if employers pay or reimburse employee’s electricity costs associated with charging an employer/salary sacrificed electric vehicle due to the FBT exemption for electric vehicles.

An employee may also use the formula to reduce the reportable fringe benefit amount in relation to a salary sacrificed/employer provided electric vehicle.

This is an evolving area – so watch this space for more information to come.