At WhipSmart, we believe the rise of the “commercial car” is just beginning. If you’re exploring an EV novated lease, you’re already ahead of the curve, but the savings shouldn’t stop at your monthly lease payment.
When you use an electric vehicle for business or commercial purposes, the ATO (Australian Taxation Office) offers significant opportunities to claim your running costs. However, unlike a simple petrol receipt, calculating electricity costs requires a slightly different approach.
Whether you are driving a Battery Electric Vehicle (BEV) or a Plug-in Hybrid (PHEV), the rules for claiming “fuel” expenses have evolved.
In this article, we start with the former: to help you maximise your EV tax return, the ATO has defined two primary methods for calculating your charging costs at the end of the financial year.
1. The Shortcut
The ATO’s EV home charging rate is the ultimate “easy mode” for your tax return. Instead of trying to decipher exactly how many cents of your home electricity bill went into your car’s battery versus your air conditioner, you can use a simplified flat rate.
The Rate: 4.2 cents per kilometre.
How it Works
Forget about smart meters or separate charging logs. This method uses your vehicle’s odometer to work out the costs. Here is the step-by-step calculation to maximise your EV tax deduction:
Determine Total Kilometres: Record your odometer readings at the start (July 1) and end (June 30) of the financial year.
Calculate Business Kilometres: If you use a valid logbook, multiply your total kilometres by your business-use percentage.
Example: 10,000 total km x 80% business use = 8,000 business km.
Apply the Rate: Multiply those business kilometres by the ATO’s $0.042 rate.
Example: 8,000 km x $0.042 = $336 deduction for electricity.
Why use the Shortcut Method?
If you are an exclusive home charger, this is “happy days.” It’s a clean, ATO-accepted way to claim running costs on a novated lease without the administrative headache of reconciling power bills.
To satisfy the record-keeping requirements, you simply need to keep:
Your odometer records.
At least one electricity bill from the relevant year (to prove you actually incurred electricity costs at home).
But what if you aren’t an exclusive home charger? If you’re hitting the highway and using public infrastructure, you’ll want to look at our next method.
2. The Roadtripper
With a name like that, the logic is almost as fast as a DC rapid charger! If you don’t do much charging at home and instead rely on Australia’s growing network of public infrastructure, like Tesla Superchargers, Chargefox, or Evie, then this method is for you.
Instead of a flat rate, you simply claim the actual cost of the electricity you’ve purchased.
How it Works
It’s as simple as gathering your digital receipts. To secure your EV tax claim, follow these steps:
Keep Your Receipts: Save every tax invoice or receipt from public charging stations. Most apps (like the Tesla or Chargefox app) store these automatically for you.
Apply Your Business Percentage: Multiply your total charging spend by the business-use percentage established in your logbook.
The Result: Voilà – that is your deductible amount.
Example: You spent $500 at public chargers over the year and have an 80% business logbook. $500 x 80% = $400 tax deduction.
Why Choose the Actual Cost Method?
This is the best option for “roadtrippers” or apartment dwellers who primarily use public fast-charging. Public electricity often costs more than home power, so claiming the actual expenses usually results in a higher novated lease tax saving than the shortcut method would provide.
Pro Tip: If you’re using this for a novated lease reimbursement, make sure the tax invoices clearly show the provider’s ABN and the amount of GST paid.
3. The Mix
Most EV drivers are a bit of both—you charge at home for the daily commute but plug into a Tesla Supercharger or a public rapid charger during weekend getaways. If this sounds like you, you can combine both methods to ensure you aren’t leaving any tax savings on the table.
How it Works
To get the best of both worlds, you simply blend the calculations:
Apply the Shortcut: Use the 4.2c per km rate for the portion of your business kilometres powered by home charging.
Add Your Receipts: Add the business portion of your actual commercial charging invoices.
The Crucial Step: No “Double-Dipping”
The ATO is very clear on one thing: you cannot claim the same kilometre twice. You must be able to demonstrate that the 4.2c shortcut rate only applies to the home-charging portion of your driving.
How to prove it: Keep records like vehicle app data (e.g., the Tesla app’s “Charge Stats”), a dedicated charging log, or a smart-home charger report. This shows the split between home and public power, proving to the ATO that you aren’t “double-dipping” your EV running costs.
That’s a Wrap for EVs!
By mastering these three methods, you can ensure your novated lease is working as hard as possible for your wallet. Whether you’re a shortcut-taker or a meticulous receipt-collector, getting your EV tax claim right is the final step in the electric revolution.
What About the PHEV?
The Plug-in Hybrid (PHEV) gets a little bit more “exciting” (and a touch more complex) because you’re juggling both electricity and liquid fuel. The rules change slightly when there’s a petrol tank involved.
Follow our link here to read our dedicated guide on PHEV tax claims.
