FBT Exempt Cars in Australia: Complete 2026 List

The FBT exemption for electric vehicles is the biggest tax benefit available to Australian car buyers. If your employer offers novated leasing, an EV can save you $5,000-15,000 per year in tax. Here's every car that qualifies and how much you actually save.

How FBT Exemption Works

Normally, if your employer provides a car (or you salary-sacrifice for one), the value is taxed as a Fringe Benefit at 47%. On a $60k car, that's roughly $12,000/year in FBT. The exemption removes this entirely for eligible EVs and PHEVs.

This means your employer deducts the car payments from your pre-tax salary, and you pay no FBT on the benefit. The savings are substantial, especially for higher income earners in the 37% or 45% tax brackets.

FBT Exempt Electric Cars (Under $91,661)

*Estimated annual tax saving based on $120,000 salary, 37% marginal rate, via novated lease. Actual savings vary by income, state, and lease provider.

Savings Calculator: How Much Do YOU Save?

On a $180k salary with a $85k EV, the FBT exemption saves $14,700 per year. Over a 5-year lease, that's $73,500 in tax savings. The car effectively costs half of what an equivalent ICE car would cost through salary sacrifice.

Which EVs Are NOT Eligible?

• Standard hybrids (HEV) like the Toyota RAV4 Hybrid, Camry Hybrid. No plug = no FBT exemption.
• Cars over $91,661 like the Tesla Model S, Porsche Taycan (base), BMW iX. These exceed the LCT threshold and are not exempt.
• PHEVs first used on or after 1 April 2025. The exemption was withdrawn from that date, so a new plug-in hybrid does not qualify.

One more date to hold in mind, because it decides what a lease signed today is worth in two years. From 1 April 2027 the full exemption applies only to EVs costing $75,000 or less, and an EV above that but still under the LCT threshold drops to a 25 per cent FBT discount. From 1 April 2029 the 25 per cent discount replaces the full exemption entirely. Leases already running are grandfathered on the treatment they started with, so signing before the cutoff locks in the current rules for the whole term.

How to Set Up a Novated Lease

1. Check with your employer if they offer novated leasing (most employers with 50+ staff do)
2. Choose your EV from the eligible list above
3. Get quotes from 2-3 novated lease providers (Maxxia, SG Fleet, Salary Packaging Australia)
4. Compare the total cost including management fees, interest rate, and residual
5. Sign the lease and your employer deducts payments from your pre-tax salary

The lease covers the car payment, insurance, registration, fuel/electricity, servicing, and tyres. Everything comes from pre-tax income.

FBT Exempt vs Buying Outright

The FBT exemption effectively gives you a 42% discount on a Tesla Model Y compared to buying it outright from post-tax income. This is why EV novated leases have exploded in Australia.

Not financial advice. Consult your accountant for your specific situation. Tax laws and EV incentives change frequently.

→ Browse all FBT-eligible electric cars on CarSorted