Charging Your EV: What You Can Claim on a Novated Lease
How home electricity, chargers, and installation get treated under the ATO's novated lease rules
ATO Shortcut Rate: Locked at 5.47c/km under PCG 2024/2.
No receipts required — just your annual odometer reading.
When you drive an EV on a novated lease, the electricity you use to charge it at home is a genuine running cost — just like fuel is for a petrol car. The ATO gives you two ways to claim it: a flat shortcut rate based on kilometres driven, or the actual cost based on what you actually spend on electricity. The right choice depends on your tariff, your solar situation, and how much you drive.
There's also a separate question about the home charger itself— the wall-mounted unit and its installation. These can often be bundled into the novated lease, but there's an important LCT threshold interaction that catches people out.
This guide explains both. It covers general information only — not tax advice. For your specific situation, confirm the approach with your novated lease provider and, if needed, a registered tax professional. The ATO rate referenced throughout is from PCG 2024/2 and is 5.47 cents per kilometre for the FBT year starting 1 April 2026 (previously 4.20 c/km through FY2025-26).
How Home Electricity Claims Work
Every kilometre you drive on home-charged electricity has a cost — you paid for that power on your electricity bill. The ATO recognises this and provides two methods for accounting for it in your lease running costs.
ATO Shortcut Rate
Claim a flat 5.47 cents per kilometre driven (PCG 2024/2, FBT year starting 1 April 2026). No receipts, no tracking, no calculation beyond your annual odometer reading.
Example
20,000 km/year × 5.47c = $1,094/year
Pros
- No admin — just log your km
- Most providers default to this
- ATO-sanctioned, no audit risk
Cons
- Often undervalues reality for standard-tariff users
- Much higher than actual cost for solar users
Actual Cost Method
Track actual electricity consumption for charging. Claim at your real tariff rate — which may be higher or lower than the shortcut depending on your plan.
Examples
3,640 kWh × 35c = $1,274/yr (flat rate)
3,640 kWh × 5c = $182/yr (solar export)
Pros
- Accurate to your actual spend
- Better claim for high-km flat-tariff users
Cons
- Requires usage tracking (smart charger, meter, logs)
- Some providers don't support it
- Higher admin, records needed for 5 years
Can You Claim the Home Charger?
A home EV charger (EVSE — Electric Vehicle Supply Equipment) is a separate question from the electricity claim. The charger is a physical asset that can potentially be bundled into the novated lease finance, claimed via the pre-tax salary sacrifice mechanism.
The charger unit
Wall-mounted AC chargers (JetCharge Mode, Wallbox Pulsar, Ocular II, Tesla Wall Connector, etc.) can typically be bundled into the novated lease. They become part of the financed amount, subject to ATO residual rules. Typical unit cost: $600 – $2,500.
Installation costs
Electrician labour, cable runs, load balancing, and switchboard upgrades are generally claimable when bundled with the charger purchase. Typical installation: $400 – $2,000, depending on site complexity. Many providers cap the combined charger+install bundle (commonly $2,500 – $3,500 total).
How the claim works
The charger is financed alongside the vehicle — its cost is folded into the total financed amount and repaid via pre-tax salary deductions over the lease term. You don't claim it as a separate tax deduction; the tax benefit comes through the salary sacrifice mechanism.
The FBT exemption for BEVs requires the vehicle's LCT value to be at or below the fuel-efficient threshold ($91,661 GST-inclusive for FY2026-27). Adding a charger to the financed amount can push a borderline vehicle over that threshold.
For example: a vehicle with an LCT value of $90,000 + a $2,500 charger bundle = $92,500. That's $839 over the limit — you lose the FBT exemption entirely for the full lease term, not just on the charger portion. On a 5-year lease this could cost $15,000–$20,000 in lost FBT savings.
Always verify your LCT position with your provider before adding a charger to the finance.
Which Method Works Best for You?
Decision Guide
You charge mostly at home on a standard flat-rate tariff (~25–35c/kWh) and don't want to track usage
You're on an EV-specific off-peak plan (e.g. AGL EV Plan at 8c/kWh overnight) — your actual cost is much lower than the ATO rate, so the shortcut claims more
You drive average kilometres (12,000–18,000/year) and don't have solar
You charge at home on a standard tariff at 30c/kWh or higher AND drive more than 27,000 km/year — at the 5.47c/km rate, actual cost only exceeds the shortcut at very high km
You have a smart charger that logs consumption automatically — low admin burden removes the main downside
You charge mostly at work (your employer covers the power — you have no cost to claim)
You charge mostly at public fast chargers — claim those receipts separately, not via the electricity budget
You have solar and charge during the day — your actual cost (forgone export credit, ~5c/kWh) is far below the shortcut rate
Worked Examples
Example 1 — Solar user, daytime charging
Tesla Model Y SR, 15 kWh/100km, 20,000 km/year, 6.6kW solar, charges ~10am–2pm
ATO Shortcut (20,000 km × 5.47c)
$1,094/yr
← Use this
Actual cost (3,000 kWh × 5c)
$150/yr
Solar export credit foregone is ~5c/kWh — actual cost is just $150/year. The ATO shortcut gives you a $1,094 claim instead. Use the shortcut — it's better by $944/year.
Example 2 — Flat tariff, average km
BYD Atto 3, 17 kWh/100km, 15,000 km/year, 30c/kWh standard tariff, no solar
ATO Shortcut (15,000 km × 5.47c)
$821/yr
← Use this
Actual cost (2,550 kWh × 30c)
$765/yr
Shortcut ($821) now edges out actual cost ($765) by $56/year. The rate increase tips the balance — shortcut wins unless you're diligently tracking consumption.
Example 3 — EV-specific off-peak plan, high km
Kia EV6, 16 kWh/100km, 25,000 km/year, AGL EV Plan (8c/kWh overnight), charges 11pm–6am
ATO Shortcut (25,000 km × 5.47c)
$1,368/yr
← Use this
Actual cost (4,000 kWh × 8c)
$320/yr
Your actual overnight cost is only $320/year. The ATO shortcut claims $1,368 — more than 4× higher. Use the shortcut. The off-peak plan saves you money on electricity but the ATO rate doesn't reflect that.
How to Set This Up
Talk to your provider before signing
Specify the electricity claim method you want to use. If you want the actual cost method, confirm they support it — not all providers do.
Specify charger model and get an installer quote
If you want to bundle a home charger, provide the unit model and a quote from a licensed electrician. Your provider needs this to add it to the finance.
Verify your LCT position before adding a charger
Ask your provider: 'What is the LCT value of this vehicle, and does adding the charger push it over $91,661?' Get this confirmed in writing.
Get your electricity method confirmed in the lease schedule
Your lease schedule should document which method is being used. Don't rely on verbal confirmation alone.
Set up tracking if using actual cost method
Options: (a) dedicated circuit meter on your charger, (b) smart charger app (JetCharge, Wallbox, etc.), (c) manual monthly logs from your electricity bill if you have a separate meter. You'll need these records for at least 5 years per ATO requirements.
Review method at lease anniversary
If your circumstances change — you install solar, move house, or change tariff — reassess which method is better at the start of the next lease year.
Common Mistakes
Assuming the 2025 threshold still applies
Relying on the old $91,387 limit instead of the indexed 2026–27 limit of $91,661 can cause you to miscalculate your headroom on premium EV variants. Always confirm the current threshold with the ATO before finalising a borderline vehicle.
Adding a charger without checking the LCT threshold
The most costly mistake on this page. If you push your vehicle over the LCT threshold by bundling a charger, you lose FBT exemption for the entire lease term.
Using both methods in the same year
You can't switch mid-year without provider approval. Attempting to blend methods creates an audit risk and is not permitted under PCG 2024/2.
Signing with the default method without checking which is better
Most providers default to the ATO shortcut. If you're a high-km flat-tariff user, you could be leaving $200–$500/year on the table by not switching to actual cost.
Forgetting to include installation costs in the charger bundle
Installation is generally claimable. If you only bundle the unit, you're missing out on the pre-tax benefit on a $400–$2,000 labour cost.
Claiming public charging through the electricity budget
Public fast charging is not a home electricity cost. It's a separate reimbursable expense — keep receipts and claim it separately, or your provider's pool accounting may be incorrect.
Assuming employer charging is claimable
If your employer provides power at the workplace, you have no electricity cost to claim — the employer is covering it. Claiming it would be claiming a cost you didn't incur.
Not getting written confirmation of the chosen claim method
Always get written confirmation from your provider on the chosen claim method and charger treatment before signing or submitting claims.
Frequently Asked Questions
→ Home EV Charging Cost Calculator — compare shortcut vs actual cost for your specific vehicle and tariff.
Next steps
General information only — not financial or tax advice. Rates, thresholds, and ATO policies are current as at April 2026 and subject to change. Confirm all details with your novated lease provider before making decisions. ATO shortcut rate sourced from PCG 2024/2.
Last reviewed: May 2026