The ATO has finalised PCG 2024/2, setting out how employers can calculate and reimburse home-charging electricity costs for electric vehicles (EVs) and plug-in hybrids (PHEVs). For Fleet Managers, HR teams, and payroll officers managing novated leases or company-supplied EVs, this guidance finally provides a standardised, low-friction way to reimburse staff without needing a smart charger or separate metering.
Below is a practical summary of what you need to do.
1. The Simple Rule: Use 4.20 cents per kilometre for EV home charging
For battery-electric vehicles, the ATO will accept a flat rate of: 4.20 cents per kilometre for any FBT year or income year starting on or after 1 April / 1 July 2022.
This is the simplest way to reimburse electricity costs and to calculate the recipient contribution for FBT.
To use this method, employers only need:
- The total kilometres travelled in the FBT year, and
- Odometer readings at the start and end of the year.
No electricity bill reconciliation. No charger data. No hardware.
2. How to Calculate the Reimbursement (EVs)
For electric vehicles: Home charging cost = Total kilometres × 4.20 cents
Example (from ATO): 10,000 km × 4.20c = $420 reimbursement.
This can be:
- A recipient contribution under the operating-cost or statutory FBT method
- An exempt expense-payment fringe benefit when reimbursing employees who own the vehicle (including novated leases)
3. Commercial charging – you must choose one or the other
If the vehicle cannot accurately report the home-charging percentage (most EVs cannot):
You must either:
- Use the 4.20c/km ATO rate, and ignore commercial charging receipts, or
- Use actual commercial charging costs only, and do not apply the ATO rate.
You cannot mix the two. This is important for payroll and policy settings.
If the vehicle can accurately report home-charging percentage (some OEM telematics platforms now offer this):
- You may claim both commercial charging costs and the home-charge amount using the ATO method.
4. What to Do If You’re Managing PHEVs
The ATO applies a different, more complex methodology for plug-in hybrids because they use both petrol and electricity.
Fleet Managers must:
- Substantiate actual petrol costs for the year
- Calculate the litres purchased
- Convert litres to petrol kilometres
- Subtract petrol km from total km to get EV km
- Apply 4.20c per electric-kilometre
- Add petrol + electricity to determine total fuel cost
This is mandatory if you want to use the ATO’s simplified approach.
5. FBT Implications for Employers
The ATO method can be used for:
- Car fringe benefits (statutory formula or operating cost)
- Car expense payment benefits
- Residual fringe benefits
- Reportable Fringe Benefit Amounts (RFBA) – even if the EV is exempt from FBT under the Electric Car Discount rules
Key points:
a. Reimbursing electricity for novated leases is exempt from FBT
This is an exempt car-expense payment benefit.
b. Recipient contributions reduce taxable value
If an employee pays for home charging and declares the amount using the ATO rate, it reduces the FBT cost under both methods.
c. FBT-exempt EVs still require RFBA reporting
The taxable value still needs to be calculated for RFBA if it exceeds $2,000.
6. Record-Keeping Requirements for Fleets
To rely on the ATO’s method, employers must keep:
- Odometer readings at start and end of FBT year
- For PHEVs: evidence of petrol costs
- If using operating cost method: a valid logbook
- A declaration from the employee confirming kilometres travelled
Employees claiming deductions must also keep:
- One electricity bill for the year
- Logbook + odometer records (if claiming via logbook method)
7. Transitional Rules
If odometer readings were not recorded at the start of:
- 2022–23 or 2023–24 (EVs), or
- 2024–25 (PHEVs)
The ATO allows reasonable estimates based on service records or logbooks.
What Fleet Managers Should Do Now
1. Update fleet policy and novated lease guidance
Specify that EV home-charging reimbursement will use the ATO 4.20c/km rate unless the vehicle provides a verified home-charging percentage.
2. Require odometer declarations
Mandate start- and end-of-year readings for all EVs and PHEVs in the fleet.
3. Decide how your organisation treats commercial charging
Choose one of:
- Use the ATO rate and exclude commercial charging costs, or
- Reimburse actual commercial charging and exclude the ATO rate.
4. For PHEVs, ensure payroll can handle the seven-step method
5. Communicate with employees
Explain the two reimbursement pathways clearly.
Bottom Line for Fleets
The ATO has given fleets a simple, nationally consistent method to reimburse home EV charging without installing meters or smart chargers.
For most fleets, the cleanest approach is: Use 4.20c/km × total kilometres — and keep odometer records.
This supports accurate FBT reporting, easy novated lease administration, and consistent treatment across your EV fleet.
