From 1 February 2024, the ATO introduced a new method for calculating the electricity cost of charging a fully electric vehicle at home. Under this practical compliance guideline, you can claim 4.20 cents per kilometre travelled to cover the cost of charging your electric car at your residence. This rate is designed to simplify the process by removing the need to calculate the exact amount of electricity drawn from your household power supply.
To use this method, you only need to keep accurate odometer records showing the total kilometres travelled during the financial year. The rate can be applied to business-use kilometres for individuals claiming a deduction in their tax return, or to work-related kilometres for employers calculating benefits and costs associated with employee vehicle use.
If some of your charging is done at home and some at public or commercial charging stations, you can claim a mix of the standard 4.20 cent rate and actual commercial charging costs. This requires a reasonable method of estimating what proportion of travel was supported by home charging versus public charging.
It is important to note that this method only applies to fully electric vehicles. Plug-in hybrids are not currently eligible for the 4.20 cent rate (unless the ATO finalises the draft guideline dealing with hybrids). Until that happens, owners of hybrids must rely on actual electricity and fuel records.
You can also choose not to use the 4.20 cent shortcut and instead claim actual electricity costs. To do this, you must have reliable evidence that clearly separates the electricity used to charge your vehicle from the rest of your household consumption. This usually requires a smart charger, an app-based recording system, or another accurate measurement method.
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