Fringe Benefit Tax Changes for Plug-in Hybrid Cars: Key Employer Updates

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Fringe Benefit Tax Changes for Plug-in Hybrid Cars: Key Employer Updates

The Australian Government has been making strides toward a cleaner transport future, and part of this effort includes revising tax incentives for electric vehicles. One significant change is the upcoming phase-out of Fringe Benefits Tax (FBT) exemptions for plug-in hybrid electric vehicles (PHEVs). If your business provides these vehicles to employees, it’s crucial to understand how the new rules will impact you and what steps you should take before the deadline.

What’s Changing?
Since late 2022, certain electric car - battery electric vehicles (BEVs), hydrogen fuel cell vehicles, and plug-in hybrids—have been exempt from FBT. However, starting 1 April 2025, PHEVs will no longer qualify for this exemption, with a few exceptions for vehicles that were already under a financially binding commitment before this date.


The phase-out of the PHEV FBT exemption is part of Australia’s broader push toward sustainable transport. While the transition may create challenges for some employers, early planning and strategic adjustments can help mitigate the impact. If your business relies on PHEVs, now is the time to review your commitments and ensure compliance before the deadline.

Helping you meet your FBT obligations.

Our accountants can help you understand the ins and outs of electric vehicles and Fringe Benefits Tax.

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