Your Tesla is FBT-exempt — so why do you still need a logbook?
Yes. An eligible battery-electric car below the fuel-efficient luxury car tax threshold ($91,387 for 2025-26) is exempt from Fringe Benefits Tax, but the private use is still a reportable fringe benefit. The employer must calculate the notional taxable value to work out the employee's reportable fringe benefits amount, and that calculation relies on the operating cost method — which requires a complying 12-week logbook.
How the electric car FBT exemption works
Since the electric car discount rules took effect, a zero-emissions car that is a battery-electric vehicle and was first held and used after 1 July 2022, with a value below the fuel-efficient luxury car tax threshold ($91,387 for 2025-26), can be exempt from FBT when made available for an employee's private use. Most Tesla models fall within this threshold. The exemption removes the FBT liability itself — but it does not remove the reporting obligation that sits behind it.
The reportable fringe benefit that survives the exemption
Even though no FBT is payable, the private use of an exempt electric car is still a reportable fringe benefit. The employer must calculate its notional taxable value — the value that would have applied if the exemption did not exist — and where an employee's total reportable fringe benefits exceed $2,000 for the FBT year, the reportable fringe benefits amount (RFBA) is reported on their income statement. That amount is not taxed directly, but it feeds into income tests for things like the Medicare levy surcharge, private health rebate, HELP repayments and family assistance.
Why the logbook still matters
To keep that notional taxable value as low as possible, employers generally use the operating cost method, which taxes only the private-use portion of total car costs. The operating cost method is only available if there is a valid logbook establishing the business-use percentage. Without one, the calculation defaults to the statutory formula method — a flat percentage of the car's base value regardless of actual use — which usually produces a higher notional value and therefore a larger RFBA for the employee. So a Tesla can be FBT-exempt and still need a complying logbook to minimise what gets reported.
What this means for novated-lease and company-car drivers
If you drive a company Tesla or hold one under a novated lease, a clean record of your business versus private kilometres protects your reportable amount. The employer needs the logbook to run the operating cost method; you benefit because a well-substantiated business-use percentage keeps your RFBA — and the income-tested consequences that flow from it — as low as the facts allow.
FAQ
Does the FBT exemption apply to plug-in hybrids?+
From 1 April 2025 plug-in hybrids no longer qualify for the electric car FBT exemption. Teslas are fully battery-electric, so this exclusion does not affect them.
Who has to keep the logbook — me or my employer?+
The employer relies on the logbook to calculate FBT, but in practice the driver is best placed to capture the trips. A shared, contemporaneous record keeps both sides covered.
Will the electric car FBT exemption last?+
The full exemption is legislated to continue through 31 March 2027, with a review scheduled after that. Rules can change, so confirm the current position each FBT year.
FBT-exempt does not mean paperwork-free — the reportable amount still hinges on a complying logbook. Odoproof keeps your Tesla's business-use percentage audit-ready without the manual logging. Join the waitlist to get early access.
Join the waitlist