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FBT & PHEVchangescoming in2025Everythingyou needto know.Version 1.0 1st January 2025
What is Fringe BenefitsTax (FBT)?FBT is a tax that employers pay oncertain non-cash benefits providedto employees. In a novated lease,the use of a car (as a benefit) isconsidered a "fringe benefit" underFBT law because the employeebenefits from a non-cashremuneration in the form of a car.How a Novated LeaseTriggers FBT:When an employer pays for thelease and running costs of the car(e.g., fuel, registration,maintenance) under a novatedlease, this benefit is subject to FBTbecause the employee enjoyspersonal use of the car. Employees can reduce the FBTliability by making contributionsusing their post-tax salary. Thisoften eliminates FBT. - 2 -About the FBT benefit:
The Australian government introduced the Electric Car Discount,which exempts certain electric vehicles (EVs), including PHEVs,from Fringe Benefits Tax (FBT). The aim is to make EVs moreaffordable for employees and encourage businesses to adoptcleaner vehicles.Definition of PHEVS:A plug-in hybridelectric vehicle (PHEV)or simply plug-in hybridAlong with EVs,PHEVs qualify fortax excemptionSavings canbe as largeas $40,000Plug-in Hybrid Electric(PHEV)PHEVs have qualified for theFBT exemption since 2022 - 3 -
The Fringe Benefits Tax (FBT) exemption for Plug-in HybridElectric Vehicles (PHEVs) will end on the 31st of March 2025. Thischange may affect new and existing leases for PHEVs, so it isimportant to understand what it means for you.The changes that arecoming...1 S T A P R I L 2 0 2 5 - 4 -
If you already have a PHEVunder a novated lease, makingchanges to your lease after the1st of April 2025 such asrefinancing, extending the leaseterm, pausing due to unpaidleave or changing employers willmean your PHEV will no longerqualify for the FBT exemption. This could increase the overallcost of your lease and impactyour running costs and benefits.For existing leases: - 5 -
To take advantage of the current FBT exemption, your PHEVlease must be fully settled and delivered before the 31st of March2025. Simply signing a contract or placing an order won’t qualify, you’llneed to ensure the vehicle is available for private use before this date.F o r n e w l e a s e s : - 6 -What Should You Do?Review Your Options Early: If you’re considering refinancing,transferring your lease, or starting a new one, now is the time toact. Refinancing before 1 April 2025 could help lock in the FBTexemption for the remainder of your lease term.Consult an Expert: Speak with your financial adviser to assess yoursituation and plan accordingly.
The Fringe Benefits Tax (FBT) exemption for Plug-inHybrid Electric Vehicles (PHEVs) will end on the 31st ofMarch 2025. This change may affect new and existingleases for PHEVs, so it is important to understand what itmeans for you.F i n d o u t m o r e - 7 -
Mitsubishi Outlander PHEVExceed ZM 2.4L AWDGet in quickper week$229*fromTotal tax savings: $36,852BYD Shark 6per week$215*fromTotal tax savings: $40,615Mazda CX-60 Evolve PHEVper week$237*fromTotal tax savings: $38,204Mitsubishi Eclipse Cross ESPHEV AQDper week$177*fromTotal tax savings $28,337- 8 -$2,000Discount
Porsche Cayenne E-HybridGet in quickper week$743*fromTotal tax savings: $28,337BYD Sealion 6per week$182*fromTotal tax savings: $32,190Cupra Formentor PHEVper week$213*fromTotal tax savings: $34,148Volvo XC60 PHEVper week$311*fromTotal tax savings $50,133 - 9 -UnderLuxurycar taxFleet +ExtraDiscounts
QUOTEAudi Q5 55 TFSI e S LineGet in quickper week$510*fromTotal tax savings: $23,497VOLVO XC90 Ultimate B5Brightper week$608*fromTotal tax savings: $25,426All PHEV specialsENQUIRESubmit an enquirytoday to seepersonalised pricesDELIVERHave your car before 1st April2025 to continue to enjoy theFBT benefitGet a free personalisedquote within two hoursfrom our expert team.Get in before the changes - 1 0 -ORDERWe help you procure your vehiclefree of charge. Inclusive of fleetdiscounts and NLA exclusive offers.
1 - Mitsubishi Outlander | 2 - Mitsubishi Eclipse Cross | 3 - Mazda CX-60 | 4 - BYD Sealion 6 | 5 - Volvo XC606 - Cupra Formentor | 7 - Porsche Cayenne | 8 - Audi Q5 9 - BYD Shark 6 10 - Volvo XC9041253678 - 1 1 -Australia’s best selling PHEVs910Some of
What is changing with the FringeBenefits Tax (FBT) exemption forPHEVs?The FBT exemption for PHEVs will end on 31March 2025. After this date, PHEVs will nolonger qualify for FBT exemptions undernovated lease agreements unless the lease issettled before this deadline.Frequently asked questionsHow does this impactnew PHEV leases?What does "settled and vehicle isdelivered" mean in this context?For a lease to be considered settled, all documentationand financial approvals must be completed, and thelease must be fully executed by 31 March 2025. Simplyhaving a contract of sale or approval in place is notsufficient. The vehicle also needs to be delivered and inyour possession by this date.If your PHEV novated lease is settled and vehicle isdelivered on or before 31 March 2025, you can stillbenefit from the FBT exemption until the end of thelease term. However, leases settled after this datewill not qualify for the exemption, which mayincrease the overall cost of your lease.
How does this affect existing PHEVleases?If your PHEV novated lease was settled before 31 March 2025, youcan retain the FBT exemption until the end of your current lease term.However, certain changes to your lease after 1 April 2025—such asrefinancing, extending the lease, taking unpaid leave, or changingemployers—may result in the lease becoming subject to FBT. This could impact the overall cost of your lease and may require areassessment of your running costs and benefits moving forward.Frequently asked questionsWhat should I do if I’m consideringrefinancing or extending my lease?Refinancing or extending your lease before 1 April2025 can allow you to retain the FBT exemption forthe remainder of the lease term. It’s essential to review your lease terms and speak toa financial adviser to understand how these changesmight affect you.What if I need to take unpaid leaveor change employers?Taking a break from your lease or transferring yourlease due to a change in employment after 1 April 2025may result in the PHEV becoming subject to FBT. If you anticipate such changes, we recommendseeking advice on how to minimise potential impacts.
How do I know if my lease willbe affected?If you have questions about your specificsituation, contact our customer service team oryour leasing specialist. We will help review yourlease terms and give general guidance on thebest course of action.Frequently asked questionsWhat happens if I settle a newlease before the deadline?If your new lease is settled before 31 March2025, you’ll continue to benefit from the FBTexemption for PHEVs until the lease term ends.Ensure you allow enough time for approvals andprocessing to meet this deadline.Who should I talk to about thesechanges?It’s important to speak with your financialadviser and our team to fully understand howthese changes impact you. We’re here to helpyou navigate your options and make informeddecisions.
What if my employer changes leasingproviders after 1 April 2025?As there will be no change to the NovationAgreement, the terms of your lease is notaltered and hence, your PHEV will stillcontinue to be FBT exemptFrequently asked questionsWhat if I change jobs and my newemployer uses the same leasingprovider?A new Novation Agreement will need tobe signed by your new employer,making this an alteration of the terms ofyour lease. As such, your PHEV maybecome subject to FBT.What if the PHEV I have on lease isreplaced after a total lossaccident? This will require an Asset Substitution formto be completed but does not require a newNovation Agreement, therefore your (new)PHEV will continue to be FBT exempt untilthe current lease term ends.
The advice provided in this publication and from Novated Lease Australia is based onexpert guidance from Gilbert and Tobin, one of the top law firms in the country, as well asfrom NALSPA, a peak body in the novated and salary packaging space. Theseorganisations are highly respected and provide insights that reflect the most up-to-datelegal and industry standards.That said, we understand that each individual’s situation is unique. Therefore, we alwaysrecommend that you consult with your own financial advisor to ensure the advice youreceive aligns with your personal financial goals and circumstances. Your advisor canprovide tailored guidance specific to your needs and help you navigate any complexitiesthat may arise.