Your Easy Guide to Fringe Benefits Tax (FBT) for 2025
What Is Fringe Benefits Tax (FBT)?
FBT is a tax that businesses may need to pay when they provide non-cash benefits to employees or their family members.
It applies whether your team is full-time, part-time or casual — and includes benefits you give in place of, or in addition to, regular wages.
Simply put:
If you give an employee something valuable because they work for you, and it’s not wages, it may be a fringe benefit.
Common Examples of Fringe Benefits
Here are the most common benefits small-to-medium businesses provide without realising they may trigger FBT:
🚗 Company Vehicles
A company car that employees can use for personal trips
Novated leases
🅿️ Car Parking
Free or subsidised parking near the workplace
🍽️ Entertainment & Meals
Staff lunches, dinners, drinks
Christmas parties (depending on cost and location)
Sporting events or concert tickets
🏠 Housing or Accommodation
Rent-free or subsidised housing
Accommodation while working away
💸 Loans or Financial Help
Interest-free or low-interest loans
Paying an employee’s personal expenses
📱 Work Equipment for Personal Use
Phones, laptops or tablets used mainly for personal reasons
If any of these apply, you might need to consider FBT.
The FBT Year — Important Dates
FBT doesn’t follow the normal financial year.
FBT Year: 1 April – 31 March
Lodgement Due: 21 May (or later if lodged through a tax/BAS agent)
Mark these dates in your compliance calendar to avoid fines or interest.
FBT Rates & How It’s Calculated
For the year ending 31 March 2025:
✔️ FBT Rate: 47%
This applies to the grossed-up value of the benefit.
✔️ Two Gross-Up Rates
These help the ATO calculate the full taxable value of a benefit:
Type 1 Benefits (GST creditable): 2.0802
Type 2 Benefits (no GST credit): 1.8868
Your bookkeeper or BAS agent calculates this for you – but it’s good to know what affects the final figure.
Exemptions & Concessions (Where You Save!)
Not everything you give to employees will be taxed. The ATO allows exemptions and concessions to help reduce your FBT bill.
❗ Minor Benefits (< $300)
If the benefit is less than $300 AND infrequent, it may be exempt.
Examples: small birthday gifts, occasional lunches, Christmas gifts.
🧑💻 Work-Related Devices
Laptops, tablets, phones may be exempt if they are mainly used for work.
🚙 Electric Car Exemption
Certain zero or low-emission vehicles may be exempt from FBT.
Note: plug-in hybrid vehicles will be affected by changes from 1 April 2025.
💼 Otherwise Deductible Rule
If the employee would have been able to claim a tax deduction personally, the taxable value may be reduced.
Your BAS Agent can help check which exemptions apply to you.
⚠️ Common FBT Mistakes (and How to Avoid Them)
Here are the biggest “oops” moments the ATO sees every year:
❌ Not keeping proper records
Missing logbooks, receipts or declarations means you may pay more than necessary.
❌ Misunderstanding “entertainment”
Meals, events and parties are often misclassified — leading to unexpected FBT bills.
❌ Forgetting car parking rules
Providing parking near your workplace may trigger FBT without you realising.
❌ Not reporting reportable amounts
Employees may need “Reportable Fringe Benefits Amounts” (RFBA) listed on their payment summaries.
❌ Assuming “we don’t give benefits”
Most businesses give some form of fringe benefit without realising it.
📝 Your Simple FBT Checklist
Use this annual checklist to stay compliant and avoid unexpected tax:
✔️ Step 1: List all benefits you provided
Cars, parking, gifts, equipment, meals, accommodation, loan help, tickets, reimbursements, etc.
✔️ Step 2: Identify which ones may be taxable
✔️ Step 3: Check for exemptions
Anything under $300? Work-related? Electric vehicle? Infrequent?
✔️ Step 4: Collect your records
Logbooks, receipts, invoices, employee declarations.
✔️ Step 5: Work with your BAS/Tax Agent
They’ll calculate the taxable value, apply exemptions, and prepare your FBT return.
✔️ Step 6: Review salary packaging arrangements
Make sure your business is structured in the most tax-effective way.
✔️ Step 7: Mark your calendar – 31 March and 21 May
Stay ahead and avoid penalties.
Need Help Understanding FBT?
If you’re unsure whether your business needs to register or lodge an FBT return — or if you want a quick review of your current arrangements — I’m here to help.
I can:
✨ Review your employee benefits
✨ Identify FBT risks
✨ Check if any exemptions apply
✨ Help you prepare for year-end
✨ Set up systems so FBT is stress-free next year
Just reach out anytime — staying compliant should be simple, not stressful.
