The ATO just updated the home charging rate for EVs and PHEVs, and it's good news for anyone using them for work. This change reflects rising electricity costs and gives both businesses and individuals a more realistic amount for home charging costs.

From 1 April 2026 (for FBT purposes) or from 1 July 2026 (for income tax purposes), the ATO’s standard home-charging electricity rate will increase from 4.20 cents per kilometre to 5.47 cents. This rate acts as a simple, ATO-approved shortcut when your household electricity bill doesn’t separately show EV-charging usage. Instead of tracking kilowatt hours or installing specialised equipment, you can simply apply the cents-per-kilometre rate to the number of kilometres travelled by the vehicle to determine the cost of electricity used.

For employers, if you provide EVs or PHEVs to employees—whether through a novated lease, company vehicle, or salary packaging arrangement—the higher rate increases the electricity cost attributed to the vehicle. This can initially increase the taxable value of the benefit when using the operating cost method, but it also increases employee “recipient contributions,” which directly lowers your FBT bill and impacts reportable fringe benefits amounts.

Individuals claiming work-related car expenses can apply the new rate to the business-use portion of kilometres travelled from the start of the 2026–27 year onwards if you use the logbook method. Older years (back to 2022) continue to use the 4.20-cent rate.

To make the most of this, you'll need a few basic records: odometer readings (ideally at the start and end of each FBT or income year), a valid logbook showing business vs private travel (if using the operating cost/logbook method), and at least one electricity bill to demonstrate that you actually incur home electricity costs. For PHEVs, remember to keep petrol receipts; you must separately calculate the petrol component using the manufacturer’s hybrid-mode fuel consumption figure and apply the ATO home-charging rate only to the electric kilometres.

Many EVs now report the exact percentage of charging done at home vs public stations. Using this data makes claims more accurate and can potentially increase deductions.

Consider this example: an employee owns their own EV and drives 25,000km in 2026–27 for work purposes. The home-charging cost would be 25,000 × 5.47c = $1,367.50 (up from $1,050). That extra $317.50 can meaningfully reduce the employee’s taxable income for the 2026-27 income year.

For now, just ensure you're using the existing lower rate for the current FBT and income years. Then, make a note to switch to the updated rate for the FBT year starting 1 April 2026 and the income year starting 1 July 2026.

Electric vehicle adoption is accelerating, and this updated ATO rate is a small but positive step, improving tax outcomes for many. Whether you have a company-owned EV, offer salary packaging, or claim car expenses personally, it's worth understanding the impact. We're here to help you run the numbers and ensure you're making the most of it.

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Please also note that many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances. Should you have any further questions, please get in touch with us for assistance with your SMSF, business, bookkeeping and tax requirements. All rights reserved. Brought to you by RGA Business and Tax Accountants. Liability Limited by a scheme approved under Professional Standards Legislation.