Amid greater environmental concerns, tech advancements, and government incentives, electric vehicle (EV) demand in Australia is on the rise. However, another factor is also playing a role, with salary packaging promoting EV adoption across the country.
What is Salary Packaging?
For the definitive source on this, let’s turn to the Australian Taxation Office (ATO). They define salary sacrificing, which is also known as salary packaging or total remuneration packaging, as an agreement where “you and your employer agree for you to receive less income before tax and in return your employer pays for certain benefits of similar value for you.”
Understandably, with any worker keen to minimise their taxes, there is widespread interest in salary packaging as it means paying less tax on your income. Locally, this arrangement has been implemented by employers to provide employees with access to vehicles at reduced costs.
What’s more, as EV popularity grows across the world, and companies also seek to boost their environmental credentials, many employers have started to include EVs as part of their salary packaging schemes. By offering salary-packaged EVs to employees, businesses can align their practices with broader social sustainability goals, while also providing an employee benefit that is designed to attract and retain talent.
How does Salary Packaging Benefit Employees?
One of the key reasons behind increasing demand for EVs through salary packaging is the financial advantage it offers to employees. By opting for a salary-packaged EV, employees can enjoy significant tax benefits, including exemptions from fringe benefits tax (FBT) and income tax. These tax concessions make EVs more affordable compared to traditional internal combustion engine vehicles.
Electric Vehicle Uptake in Australia
Of course, these are not the only benefits available to prospective EV owners. There are a range of initiatives designed to promote EV adoption, including financial incentives and rebates. In some states, additional incentives such as stamp duty exemptions and registration discounts may be available for EV owners, which is part of a comprehensive push to lift engagement and boost sales in this category as the government eyes a steep reduction in emissions over the coming years.
Over the last couple years, Australia has also welcomed an increasing assortment of new EV models down under. Originally, Australia was something akin to a forgotten market, but more recently auto-makers have started to release more options locally. From compact hatchbacks to luxury SUVs, there is now a suitable EV option for just about ever category, although many would still be aware that, on the whole, EV prices in Australia are dearer than overseas markets.
Last but not least, EV infrastructure is slowly improving. Australia has seen an expansion in charging networks across the country, which ultimately goes some way towards addressing a primary concern among prospective buyers – dealing with limited driving range. As such, with more charging stations popping up in convenient locations, EV owners can feel reassured that their lifestyle needs won’t be compromised by being unable to find a charging station.
Wrapping Up
A number of initiatives have played a significant role in driving increased demand for electric vehicles in Australia, and salary packaging is one such factor. WIth EV owners afforded tax benefits and even financial incentives at a government level, salary packaging schemes are playing their part to encourage employees to choose this growing format over petrol or diesel cars.
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