Published: October 2025
Updated: November 2025
Fringe Benefits Tax (FBT) is a key obligation for Australian employers providing non-cash benefits to staff. With the FBT year running from 1 April 2024 to 31 March 2025, understanding updates and compliance is vital to manage costs effectively.
FBT is levied on employers for benefits like company cars, entertainment, or expense reimbursements given instead of salary. The tax equals the value of these benefits, ensuring they are taxed similarly to income. Employers pay FBT, not employees, and it applies to benefits with a taxable value over certain limits.
For the 2024-25 FBT year:
Use this formula: Taxable Value × Gross-up Rate × FBT Rate (47%).
Reduce liability by employee contributions or exemptions. Use ATO calculators for precise estimates.
Certain benefits avoid FBT:
Common taxable benefits include car parking, gym memberships, and health insurance reimbursements. Review hybrid work setups, as home office equipment might be exempt if work-focused.
Stay informed via the ATO to avoid audits, especially in high-risk categories like vehicles and entertainment.
What is Fringe Benefits Tax (FBT) in Australia?
FBT is a tax paid by employers on non-cash benefits provided to employees, such as cars or entertainment, to ensure they are taxed equivalently to salary.
How is FBT calculated for 2025?
Calculate using the formula: Taxable value × Gross-up rate (2.0802 or 1.8868) × 47% FBT rate. Adjust for exemptions and employee contributions.
Are electric vehicles exempt from FBT in 2025?
Yes, zero or low-emission EVs under $91,387 are exempt, but plug-in hybrids lose this exemption from 1 April 2025.
What are common FBT exemptions?
Exemptions include minor benefits under $300, work-related items like laptops, and certain remote area perks. Entertainment may qualify if infrequent.
When do I need to lodge an FBT return?
Lodge by 21 May 2025, or 25 June 2025 if using a tax agent, for the year ending 31 March 2025.
How can I reduce my FBT liability?
Minimise through employee contributions, salary packaging, claiming exemptions, and accurate record-keeping for private use portions.
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