If you drive an electric vehicle or plug-in hybrid for work - or you run a business that provides EVs to employees - there’s a quiet but meaningful ATO update that’s worth knowing about before it kicks in.
The ATO has increased its standard home-charging electricity rate from 4.20 cents per kilometre to 5.47 cents per kilometre. It applies from 1 April 2026 for FBT purposes, and from 1 July 2026 for income tax purposes.
Most households don’t have a separate electricity meter for their EV. That makes it genuinely hard to know exactly what it costs to charge at home - the kilowatt hours used by the car are buried in the same bill as the rest of the house.
The ATO’s home-charging rate is a practical workaround. Instead of tracking exact kilowatt-hour consumption or installing specialised metering equipment, you simply multiply the rate by the number of kilometres the vehicle travelled. The result is your approved electricity cost figure for tax purposes.
The rate going up from 4.20 to 5.47 cents reflects the reality that electricity costs more than it did. It’s a more accurate number, and it flows through to better tax outcomes for most people using it.
For businesses running company vehicles, novated leases or salary packaging arrangements involving EVs or PHEVs, the higher rate has a few practical effects:
The interaction between these elements is worth modelling properly, particularly if you’re running a fleet or have multiple salary packaging arrangements in place.
If you use the logbook method to claim deductions for an EV you own, you can apply the new 5.47 cent rate to the business-use portion of kilometres driven - but only from 1 July 2026 onwards. Any claims covering 2024–25 or earlier continue to use the old 4.20 cent rate.
Example: 25,000 work kilometres in 2026–27 × 5.47c = $1,367.50 in home-charging costs. Under the old rate that was $1,050. The extra $317.50 is a legitimate additional deduction for the year.
For PHEV drivers, there’s an extra step. You need to separately calculate the petrol component using the manufacturer’s hybrid-mode fuel consumption figure, then apply the home-charging rate only to the electric kilometres. Keep your petrol receipts.
The ATO keeps the compliance requirements simple. You need:
One useful bonus: many modern EVs now report exactly what percentage of charging occurred at home versus public stations. If your car tracks this, use it - it can make your claim more accurate and potentially increase your deduction.
Getting the dates wrong - in either direction - means your claim or FBT calculation will be off. Worth double-checking before you lodge.
EV adoption is growing quickly, and the tax treatment is still relatively new territory for a lot of businesses and individuals. The updated rate is a straightforward improvement but the way it interacts with FBT, salary packaging and income tax deductions means the full impact isn’t always obvious upfront. If you're looking for practical ways to reduce your tax before EOFY more broadly, our free No-Stress Tax Guide is worth downloading - it covers 12 strategies you can act on before 30 June.
If you have a fleet, offer salary packaging, or claim car expenses personally, now is a good time to model what this change means for you. Our team can help you run the numbers and make sure you’re claiming everything you’re entitled to.
Get in touch with the Trekk Advisory team to review your EV tax position.