- Author: Staff writers
- Posted: May 30, 2023
Drive into the Future with an Electric Vehicle
Electric vehicles (EVs) became a lot more affordable for businesses, CFOs and your employees with the introduction of the Federal Government’s Electric Car Discount Policy at the end of 2022.
CFO Magazine A/NZ had the opportunity to sit down with Anthony Dijanosic, CFO at Smartsalary, one of Australia’s leading salary packaging and novated leasing organisations, on how CFOs can successfully transition to an EV by making the most of the new government policy, plus the additional benefits of how salary packaging EVs can help your organisation achieve its Net Zero climate goals, and help you attract and retain quality talent.
What are the benefits for organisations when it comes to helping their employee’s salary package electric vehicles (EVs), and how can CFOs maximise these benefits?
AD. Aside from improving an organisation’s employee value proposition, supporting EV uptake among employees can help an organisation achieve its ESG goals, because employee business travel and commuting to and from work count towards an organisation’s Scope 3 emissions. For anyone trying to win government and large corporate contracts, reducing emissions is becoming a must.
CFOs should partner with an experienced packaging provider with the scale to negotiate great prices from car dealers, and relationships with key EV manufacturers and charging infrastructure providers to make the EV switch easy.
Is it cost-effective to switch to EVs, and how can CFOs effectively budget for these costs?
AD – Salary packaging can save thousands of dollars off the cost of owning an EV. With the new Federal Government Electric Car Discount Policy, you can lease an eligible EV and pay all running costs with pre-tax dollars, with zero GST on the purchase price of the car or the running costs.
With reputable salary packaging providers, salary packaging is free to employers, so there are generally no costs for a CFO to budget for.
How will the switch to EVs impact an organisation’s carbon footprint, and what are the potential environmental benefits?
AD – For service organisations in particular, one of the biggest carbon footprint contributors is probably employee travel – emissions from business travel and the commute to and from work.
EVs can play a huge role in reducing an organisation’s footprint, producing significantly lower emissions than a combustion engine car. Switching to EVs means fewer greenhouse gases and less air pollution, meaning employees and employers alike are contributing to a better environment for the future.
What are the tax implications of salary packaging EVs for an organisation, and how can CFOs ensure compliance with relevant tax laws and regulations?
AD – When an employee salary packages a car, their employer is providing them a fringe benefit, but the associated FBT is effectively borne by the employee as a post-tax deduction from their salary. Under the new Federal Government policy, there is no post-tax deduction if the EV purchase price is less than the $84,916 luxury car tax threshold. That saves employees thousands of dollars. To make sure they meet compliance obligations, CFOs should partner with a salary packaging provider that invests heavily in tax compliance, technology, data security and privacy.
How can CFOs ensure that their employees have access to charging infrastructure for their EVs?
AD – Fortunately, charging infrastructure is becoming more commonplace, with both the private and public sectors building networks. We’re seeing traditional fuel companies offering cards that can be used to pay for recharges, with the cost charged back to an employee’s salary packaging account, meaning even the recharges are tax effective.
Almost all EV drivers will charge their vehicles at home at least some of the time and most EVs can either be charged via a normal power point or a home charging station. Aside from at-home setups, CFOs could consider installing charging infrastructure at work sites. A salary packaging provider should be able to arrange charging infrastructure for your work site or your employee’s home.
How can CFOs effectively communicate the benefits of switching to EVs and salary packaging, and make a competitive advantage to current and future employees?
AD – It’s all about take-home pay. Whether talking about EVs or other benefits, letting employees package is like giving them a pay rise at zero cost to you.
With no cost to employers, packaging is a great way to help attract and retain high-calibre talent, reduce staff turnover and recruitment costs, and increase employee satisfaction.
Your packaging provider should give you the tools to make effective communication easy, like salary packaging calculators and industry-specific education content that help your employees understand how much packaging can save them.
What are the risks and challenges associated with switching to EVs and salary packaging, and how can CFOs mitigate these risks?
AD – With the right packaging provider, there is little risk, but owning an EV does come with some challenges – if you live in an apartment for example, you may need strata permission to install a charger. And if you drive long distances, you’ll probably need to do extra pre-trip planning. But with the rapid growth in popularity of EVs, these challenges will soon likely be a thing of the past.
Packaging a car involves things that might be new to some people – a balloon payment at the end of the lease and for non-EVs, post-tax salary deductions. But when people take the opportunity to understand the product, it generally makes a lot of sense for them to take it up – that’s why Smartsalary focuses so much on customer education. CFOs can mitigate these challenges by partnering with a reputable packaging provider that can guide them through the transition.
How can CFOs effectively manage the transition to EVs and salary packaging, and what resources and expertise are available to make this transition successful?
AD – Implementing a salary packaging program is easy, with the right partner. Smartsalary is a leading packaging provider to government, healthcare, not-for-profit and corporate employers, big and small, helping more than 180,000 Australians access salary packaging.
If you want to transition your corporate fleet to EVs or help your employees save thousands of dollars in their own shift, we make the transition a smooth one. We negotiate great prices from car dealers, organise finance and insurance, and take the hassle out of ongoing charging and maintenance. We can even sell your current car for you. We are packaging specialists, so you don’t have to be.
For more details on how Smartsalary can assist your organisation visit: www.smartsalary.com.au