Reportable fringe benefits
The exempt EV that still shows on your income statement
Updated
An electric car on a novated lease can be completely free of fringe benefits tax and still add tens of thousands of dollars to the income figure that some government tests use. Here is how big that figure gets and where it bites.
Exempt, but reportable
The ATO says the private use of an eligible electric car is exempt from FBT but is still a reportable fringe benefit, so the employer has to work out its notional taxable value. (ATO, checked )
If the total taxable value of your reportable benefits is over $2,000 in an FBT year, it is grossed up by the lower gross-up rate, 1.8868, and reported on your income statement. (ATO, checked )
The reportable amount is not assessable income. It is reported because income tests for some government benefits and obligations include it. (ATO, checked )
How big it gets
Under the statutory formula the notional taxable value is 20% of the car’s value. Gross that up and a $60,000 electric car on a full-year lease produces about $22,640 a year. The table runs the same sum for six car values, today and under the draft’s 25% discount, where you would pay 15% of the value from after-tax pay and only the remaining 5% is reported.
The draft keeps reportable amounts on the 0.2 fraction even when a discount applies, less any after-tax contribution. (Treasury exposure draft explanatory materials, checked )
Reportable fringe benefits amount a year
| Car's value | Exempt (commit by 31 Mar 2027) | 25% discount (from Apr 2029) |
|---|---|---|
| $40,000 | $15,090 | $0 |
| $50,000 | $18,870 | $4,720 |
| $60,000 | $22,640 | $5,660 |
| $70,000 | $26,420 | $6,600 |
| $80,000 | $30,190 | $7,550 |
| $90,000 | $33,960 | $8,490 |
Estimate only. General information, not tax advice. It uses 2026–27 tax rates and the FBT statutory formula, and assumes you pay an after-tax contribution to clear any FBT. The rules for commitments from 1 April 2027 are a Treasury exposure draft, not law, and may change. Confirm your numbers with your employer, your novated lease provider or a registered tax agent.
Where it bites
- Study loan repayments. Repayment income includes reportable fringe benefits. For 2026–27 the compulsory repayment is 15 cents for each dollar of repayment income between $69,529 and $129,717, and 17 cents above that up to $186,050. (ATO, checked )
- The Medicare levy surcharge. Income for surcharge purposes includes reportable fringe benefits, and the surcharge is charged on them as well as on taxable income if you have no private hospital cover. (ATO, checked )
The calculator shows the reportable amount for any car, salary and commitment date.
Questions
Do I pay tax on my reportable fringe benefits amount?
Not income tax or the Medicare levy: the amount is not part of your assessable income. It is added to your income for some tests, and the Medicare levy surcharge, if you have no private hospital cover, is worked out on it too.
Why does an exempt car create a reportable amount at all?
Because the law makes exempt electric cars reportable. Your employer works out the taxable value the car would have had, grosses it up, and reports it through payroll.
Can I reduce it?
Paying part of the car's costs from after-tax salary reduces the taxable value, and with it the reportable amount, but it also gives up some of the exemption's tax saving. Whether that trade is worth it depends on which income tests affect you.