ATO NEW Guidelines for Charging Cost of Hybrid Vehicles
An employer or employee may wish to calculate home charging cost of an electric car for reimbursement of these costs or providing an electric car to an employee.
On 20 November 2025, the ATO updated Practical Compliance Guideline PCG 2024/2 to expand its guidance on calculating home electricity costs for electric vehicles (EVs) to include plug-in hybrid electric vehicles (PHEVs).
Original PCG 2024/2
In February 2024, the ATO released guidance in relation to calculating the cost of charging a zero emissions electric car at home.
A “shortcut method” is as follows with a flat rate:
-4.20 cents x total number of kilometres travelled by car in the year
Originally the method only applied to zero emissions electric car (defined as battery electric vehicles. The method could not be applied to plug-in hybrid electric cars, regardless of whether the hybrid electric car was FBT-exempt. Fortunately, the ATO updated it guidelines.
Latest PCG 2024/2
Based on the latest version of PCG 2024/2 finalised on 20 November 2025, the shortcut method applies:
From 2022/23 for zero emissions electric cars (EV); and
From 2024/25 for plug-in hybrid electric cars (PHEV).
Using Shortcut Method is a Choice
An employer can choose to rely on the shortcut method in PCG 2024/22. Alternatively, the cost is calculated at its actual cost.
The choice is undertaken on a per vehicle basis and applies to the whole year. However, a decision can be changed from one year to the next.
PHEV 7 Steps
Since Plug-in Hybrids use both petrol and electricity, you must “filter out” the petrol kilometres to find the electric ones:
- Record total petrol costs for the year.
- Divide cost by the average petrol price (AIP data) to get litres used.
- Divide litres by the manufacturer’s fuel consumption rate to get “petrol kilometres”.
- Record total kilometres (from odometer).
- Subtract petrol kilometres from total kilometres to get electricity kilometres.
- Multiply electricity kilometres by 4.2c.
- Add this to your actual petrol costs to get your total fuel expense.
Charges at a Commercial Charging Station
In PCG 2024/2, the ATO confirms that the PHEV shortcut method can be used to determine home charging electricity costs for a plug-in hybrid electric car, even if the employee has charged the car both at home and at commercial charging stations.
Record Keeping Relief
For 2022–23 and 2023–24 (EVs): If you didn’t record the odometer on the exact start date, the ATO will accept a “reasonable estimate” (e.g., using service records or logbooks from around that time).
For 2024–25 (PHEVs): The same reasonable estimate rule applies to the opening odometer reading for Plug-in Hybrids.
