The ATO has issued draft guidance for final consultation on how to calculate electricity costs when a PHEV is charged at home for tax purposes.
Following an initial consultation with industry experts including FCAI in 2024, the ATO is updating its guidance PCG 2024/2DC on Electric vehicle home charging rate – calculating electricity costs when a vehicle is charged at an employee’s or individual’s home to cover the needs relating to PHEV charging. This guidance applies specifically for Fringe Benefits Tax where employers provide PHEVs to their employees and pay for expenses associated with the car as an expense payment benefit, or for income tax deductions for individuals who use their PHEV for work-related purposes.
The proposed methodology is as follows:
- Step 1: Calculate actual petrol costs for the FBT or income year
- Step 2: Calculate actual quantity of petrol purchased in the year by totalling the actual quantity in litres of petrol purchased during the year, or converting actual petrol cost to litres of petrol purchased in the year by dividing the Step 1 amount by the average petrol rate.
- Step 3: Calculate total petrol kilometres by converting the petrol amount into litres using the PHEV’s petrol consumption rate (as Condition B test cycle fuel economy figure provided by the OEM)
- Step 4: Calculate total annual kilometres
- Step 5: Calculate total electricity kilometres (as Step4 amount – Step 3 amount)
- Step 6: Calculate total electricity cost by multiplying the Step 5 amount by the EV home charging rate (currently set at 4.20 cents per km)
- Step 7: Calculate total fuel expenses by adding the Step 1 amount (actual petrol costs) to the Step 6 amount (total electricity cost)
The guideline will apply for PHEVs from 1 April 2024 for FBT purposes and from 1 July 2024 for income tax purposes.
Consultation is open to 24 July 2025, although the methodology is unlikely to change significantly.
Members can contact Richard Delplace, Director Emerging Technologies for further information.