Fringe Benefits Tax (FBT) Services

Fringe Benefits Tax is one of the most misunderstood areas of business taxation in Australia. Many business owners provide benefits to employees or directors as part of everyday business operations — and do not realise these benefits may create FBT obligations with the ATO.



At Taxcor, we help businesses identify fringe benefits, calculate taxable values correctly, apply available exemptions, and prepare accurate FBT returns. Proper FBT management can reduce your exposure significantly — and avoid the penalties that come with getting it wrong.

Meet ATO requirements

Professionally managed

Tax planning opportunities

Avoid common errors

What Is Fringe Benefits Tax?

FBT is a tax paid by employers on certain non-cash benefits provided to employees, directors, or their associates in connection with employment. It is separate from income tax and is paid by the employer, not the employee. The FBT year runs from 1 April to 31 March.


Common fringe benefits include:

  • Company vehicles available for private use
  • Entertainment expenses — meals, functions, events
  • Low-interest or interest-free loans
  • Payment of personal expenses on behalf of employees
  • Gym memberships
  • Car parking benefits
  • Accommodation benefits
  • School fees paid for employees or their families
  • Expense reimbursements for private costs

Example:

ABC Building Group Pty Ltd provides a company vehicle to its director for both business and personal use. Because the car is available for private use, the company may have an FBT obligation and may need to lodge an FBT return.

Why FBT Compliance Matters

Many businesses trigger FBT obligations without realising it. The most common areas of risk are company vehicles, director expense reimbursements, entertainment, and employee loans. Getting these wrong can result in ATO penalties and interest charges, unexpected tax liabilities, payroll reporting errors, incorrect deduction claims, and the cost and disruption of an ATO audit.



On the other side, proper FBT management can also reduce your tax exposure by correctly applying exemptions, concessions, and alternative calculation methods that many businesses miss entirely.

Common Fringe Benefits

  • Motor Vehicle Benefits

    Company vehicles provided to employees or directors are one of the most common FBT triggers. FBT may apply where a company car is available for private use, garaged at the employee’s home, or used by the employee outside of work hours.


    Keeping accurate logbooks and vehicle records is essential for correctly calculating FBT liability and may substantially reduce the amount payable.


    Example: A director uses a company ute on weekdays for site visits and on weekends for personal use. Depending on the vehicle classification and usage, FBT may apply.

  • Entertainment Benefits

    Providing entertainment to employees, clients, or associates can attract FBT depending on who receives the benefit and the nature of the event. Restaurant meals, staff parties, sporting event tickets, and corporate hospitality all need to be reviewed carefully. Some entertainment expenses attract FBT, some are non-deductible, and some qualify for exemptions. The correct treatment is not always obvious.

  • Expense Payment Benefits

    If a business pays or reimburses private expenses on behalf of an employee or director — personal travel, private phone bills, home utility expenses, or school fees — FBT may apply on those payments.

  • FBT by Business Structure

    Companies

    Companies most commonly provide benefits through vehicles, entertainment, expense reimbursements, and director-related transactions. We assist companies with FBT return preparation and lodgement, motor vehicle FBT calculations, logbook reviews, entertainment expense analysis, director loan reviews, payroll and STP adjustments, and ATO compliance support.


    Family Trusts

    Trusts operating businesses or employing staff may have FBT obligations where benefits are provided to employees, corporate trustee directors, or family members involved in the business. We provide the same range of FBT services for trust structures as we do for companies.


    Sole Traders and Partnerships

    Sole traders generally cannot provide fringe benefits to themselves, so FBT rarely applies. However, if a sole trader or partnership employs staff, FBT obligations may arise for benefits provided to those employees.

  • FBT Exemptions and Concessions

    Certain benefits may qualify for FBT exemptions or concessions, which can significantly reduce your FBT liability. 


    Common exemptions include:

    • Portable electronic devices provided primarily for work purposes
    • Minor benefits below the minor benefit threshold
    • Work-related items such as tools and equipment
    • Eligible electric vehicles (subject to ATO conditions and thresholds)
    • Otherwise deductible benefits — where the employee could have claimed the cost as a tax deduction

  • Record Keeping

    Good record keeping is critical for accurate FBT reporting. The ATO requires records to be kept for at least five years. Key records include vehicle logbooks and odometer readings, tax invoices and receipts, employee declarations, entertainment diaries, loan agreements, payroll reports, and travel diaries.

How We Can Help

Our FBT services include:

FBT return preparation and lodgement

FBT calculations and reviews

Motor vehicle logbook reviews and calculations

Entertainment expense reviews

Employee benefit reviews

Director loan reviews

Salary packaging advice

FBT exemption reviews

ATO audit support

Payroll reconciliation

Single Touch Payroll (STP) and reportable fringe benefit reviews

Tax planning and compliance advice

Fixed-Fee Packages

  • Fixed-fee annual FBT review and return preparation
  • No hidden costs
  • General taxation advice included
  • ATO compliance assistance

Cloud Accounting Software

We support Xero, MYOB, and QuickBooks, and can assist with FBT coding reviews, vehicle expense tracking, payroll setup, and reporting.

Frequently Asked Questions

  • Who pays Fringe Benefits Tax?

    FBT is paid by the employer, not the employee. The tax is calculated on the taxable value of benefits provided during the FBT year (1 April to 31 March).

  • Does every business need to lodge an FBT return?

    No. Only businesses that have provided fringe benefits to employees or directors and have an FBT liability need to lodge a return. If you are unsure whether FBT applies to your situation, we can review your arrangements.

  • Is a company car subject to FBT?

    Potentially yes. If a company vehicle is available for private use by an employee or director, FBT is likely to apply. The amount depends on the calculation method used and the records maintained.

  • Can a logbook reduce FBT?

    Yes. A valid logbook showing the proportion of business versus private use can significantly reduce FBT liability when compared to the statutory method. Logbooks must cover a continuous 12-week period and be renewed every five years (or earlier if vehicle use patterns change significantly).

  • Are electric vehicles exempt from FBT?

    Certain eligible electric vehicles may qualify for an FBT exemption, subject to specific ATO conditions. We can help you assess whether your vehicle qualifies.

  • What if FBT returns have not been lodged?

    Failure to lodge FBT returns or report fringe benefits correctly can result in penalties, interest charges, and ATO compliance action. We can assist with overdue FBT returns and historical FBT reviews.

  • Can directors trigger FBT obligations?

    Yes. Non-cash benefits provided to directors through the company — including vehicles, expense reimbursements, and personal payments — can create FBT obligations that need to be properly reported.