We started a new fringe benefits tax (FBT) year on April 1. To set yourself up for future success, I’m sharing some important information for employers, including some of the key changes that may impact your FBT obligations.
Let’s start with a quick refresher on FBT.
FBT is a tax paid by employers on certain non-cash benefits provided to their employees, or to their employees’ family or other associates.
If you’re wondering what may be considered a fringe benefit, here are some common types:
- a work car used for private purposes
- gym membership
- providing entertainment to employees
- a benefit offered under salary sacrifice arrangement.
You can find an overview of how FBT works at ato.gov.au/howFBTworks.
Make a note of your due date
If you provided certain benefits to your staff in addition to salary and wages between 1 April 2024 and 31 March 2025, you need to work out if you have an FBT liability.
If you lodge your own return, or use a tax professional who lodges by paper, you must lodge your FBT return and pay the amount owned by 21 May 2025.
If you use a tax professional who lodges electronically on your behalf, you may have until 25 June 2025. If this is your first time lodging through a tax professional, ensure you’re on your agents FBT client list by 21 May to be eligible for a concessional due date.
It’s important for employers to meet these deadlines if they have an FBT liability, as both lodgments and payments need to reach the Australian Taxation Office (ATO) by the due dates to avoid any interest and penalties.
How to lodge on time & get it right
To get your FBT reporting right, don’t skip these steps:
1) Identify – are you providing benefits and what type?
2) Determine – the taxable value of each fringe benefit
3) Lodge, report and pay
Lodge an FBT return (if you have an FBT liability or paid FBT instalments through your activity statements).
Report the grossed-up amount of each employee’s reportable fringe benefits through Single Touch Payroll and on their payment summary (if the total taxable value is more than $2,000)
Pay the FBT owed by the due date
4) Keep records – that support your calculations and FBT position
If you don’t have an FBT liability for the FBT year and you’re registered for FBT, you should send us a completed notice of non-lodgment. If you’re lodging a ‘nil’ return you first need to identify the fringe benefits provided and determine their taxable value to ensure you’re reporting and calculating FBT correctly. Taking the time to do this will help avoid mistakes.
We do see some employers lodging nil returns when they haven’t taken the steps to identify whether they have provided a benefit. This is an issue the ATO are focused on addressing as part of our compliance program.
You can lodge your FBT return:
- electronically using Standard Business Reporting (SBR) enabled software
- through your agent, or
- by posting a paper FBT return to the ATO. Make sure you leave plenty of time to submit.
To get started, visit ato.gov.au/fbtlodgment
Record keeping options
Good record keeping is essential to making sure everything runs smoothly whether you lodge yourself, or through a tax professional.
This is the first FBT year you have the choice to rely on existing corporate records for some fringe benefits.
If you used existing records instead of travel diaries and declarations for benefits you offered, they need to meet the minimum required information at the time of lodging your FBT return. For example, instead of using a travel diary an employer may have a copy of an employees’ work calendar that has kept all travel information.
You can continue to use the approved forms, and for eligible benefits, you can also use a combination of both methods for each employee for each benefit.
Keeping the right records enables you to correctly calculate the taxable value of the benefit so you can correctly report your FBT liabilities.
You can find more information, including whether the fringe benefits you’re offering are eligible for alternative record keeping options, at ato.gov.au/fbtaltrecordkeeping
End of the PHEV exemption
The FBT exemption for plug-in hybrid electric vehicles (PHEVs) ended 31 March 2025. Employers can continue to apply the exemption if you meet these requirements:
- The plug-in hybrid electric vehicle was used, or available for use, before 1 April 2025 (and that use, or availability for use, was exempt).
- You have a financially binding commitment to continue providing private use of the vehicle, or availability for use, of the car for private purposes on and after 1 April 2025 (but any optional extension of the agreement is not considered binding).
If there is a change to the pre-existing commitment on or after 1 April 2025, the FBT exemption for the PHEV will no longer apply.
For more information, see ato.gov.au/fbtphev
Help and support
We have lots of information and helpful resources available on the ATO website, including a free online learning hub for small businesses. Check out smallbusiness.taxsuperandyou.gov.au
I’d also encourage you to subscribe to the ATO newsletters and follow our social channels to keep up to date on tax and super information.
We want to help you get it right the first time. If you’ve made a mistake with your FBT return you can amend it. If you are experiencing difficulties that make it hard to meet your obligations, you can contact us before the due date to discuss your circumstances.
For more information visit ato.gov.au/FBT.
Peta Lonergan is the Assistant Commissioner for Risk and Strategy Employer Obligations at the ATO. An experienced tax professional with over 20 years’ experience, Peta started out as a tax accountant before joining the ATO and received her CPA in 2002. Peta has extensive experience across a number of diverse roles in the ATO. Starting out as a frontline business auditor and tax technical specialist, she then progressed onto strategic programs. She is passionate about supporting and educating employers to help them comply with their tax and super obligations.