‘No downside’: Game-changing EV salary sacrifice policy sees Tasmanian firm cash in on FBT exemptions

All staff — from undergrads to bookkeepers — at a Tasmanian accountancy firm can salary sacrifice for an electric vehicle while the business cashes in on the Albanese government’s newly-minted fringe benefits tax (FBT) exemption in a new policy that so far has no downside.

Bentleys Tasmania director Robin Allardice says the idea of salary sacrificing for an EV came to him as soon as the environmentally-driven tax legislation, which excuses all Australian employers from paying the FBT on eligible electric cars, became law at the beginning of the financial year.

“I want this to be a place where people want to be and I want to do whatever we can to achieve this,” Allardice told SmartCompany.

“Being a leader in the uptake of new initiatives helps.”

Bentleys Tasmania, which is one of 18 locations in the Bentleys network across Australia, New Zealand and China, currently employs more than 40 staff who work with clients across a range of industries including property, healthcare, and tourism.

The salary sacrifice EV policy was a natural fit for the team at Bentleys Tasmania, a service business where the team frequently get behind the wheel to meet with clients who are based in a state that leads the world for its negative carbon emissions.

Tasmania was officially declared carbon-negative in May last year, according to research from the Australian National University (ANU) and Griffith University, after the state government slashed the amount of logging in Tasmania’s native forests.

“We have recently employed a carbon consultant and partnered with an organisation to provide carbon accounting to assist clients to reduce their emissions,” Allardice said.

“This policy helps us reduce our emissions and we need to live what we are telling others to do.”

Allardice continues that he believes all business leaders have an urgent responsibility to help create a cultural change in employees towards more environmentally-sound practices, but with undergraduates on staff too, he says the change is proving to be a two-way street.

“People coming out of school are far more environmentally aware and focused than they were in previous generations,” he said.

“So, it may be the other way around that people make business leaders change. If leaders keep doing ‘what they did yesterday’ and aren’t progressive, they aren’t leaders and either they will attract like-minded people or won’t be able to attract people at all.

“In the current climate where people are in short supply, businesses need to be giving people a reason to choose them.”

Allardice says his staff — including undergraduates and graduates, support staff and bookkeepers — were excited by the opportunity to salary sacrifice for an EV, though the MD appreciates that it will “take time to gain traction”.

“A new car is a major purchase and people don’t make an instant decision on it. Also, currently, EVs aren’t easily available or affordable,” he said.

But, he says, as the demand increases — and as the Labor government’s long-awaited fuel efficiency standards are introduced — Allardice is confident it’s only a matter of time until a supply of cost-effective EVs floods the Australian market.

“So as our people decide to purchase a new vehicle, by being able to salary sacrifice it FBT free, they have more choice as they can afford vehicles they may not have otherwise been able to.”

An undergraduate accountant at Bentleys Tasmania, Ali Badenach says she’d love to own an EV herself someday, declaring the greener vehicle the undisputed “way of the future” for the emissions-heavy automotive industry.

At present, however, we are somewhat of a global laggard. EV sales made up just 3.1% of Australia’s car sales in 2022 according to new data from the Federal Chamber of Automotive Industries, compared to a 10% market share worldwide.

Aside from the environmental benefits, the salary sacrifice EV policy also made Badenach appreciate how her workplace is providing support to her generation at a time when the cost of living is skyrocketing.

“This kind of employer support, plus government initiatives, is a great way to make it achievable for people just starting out in their careers,” she said.

When asked what advice Allardice would give other business leaders mulling over the same salary sacrifice EV policy, he says he hasn’t been able to find any downside yet — there’s really “only been upside”, he says.

“The recent legislation on FBT exemption for EVs makes this a win all around — our employees can acquire an EV, save on tax and reduce their carbon emissions and, as a business, we can actively support carbon neutrality,” he said.

“I hope that more businesses — not just in Tasmania, but all across Australia — also offer this opportunity to staff at every level.

“More EVs on the road means fewer emissions — so we should be encouraging everyone to be a part of that change.”