Fringe Benefits Tax (FBT) Management

Fringe Benefits Tax (FBT) is a tax employers pay in Australia when they provide certain benefits to employees or their associates as part of their job. It's different from income tax and is based on the taxable value of the benefits provided. The FBT year runs from 1 April to 31 March.

FBT and work vehicles

If you're using a tool of trade vehicle (like a company car) or a novated lease vehicle (leased by your employer), there may be FBT obligations if the vehicle is used for personal reasons—not just for work purposes.

Example: If a sales rep uses a work vehicle to commute between home and the office or for weekend trips, that personal use is considered a fringe benefit.

Types of vehicles considered 'cars' for FBT purposes include:

Station wagons
Panel vans
Utilities (including 4WDs) carrying less than one tonne
Any passenger vehicle designed for fewer than 9 people

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Calculating your FBT liability

There are two main methods for calculating FBT on vehicles:

Statutory Formula Method – Uses a fixed percentage.
Operating Cost Method – Based on the actual percentage of business use (i.e. the more personal use, the higher the FBT).

If your vehicle isn’t classified as a car and is used beyond allowed limits for private use, it may be considered a residual benefit. In that case, either:

The operating cost method is used to calculate the FBT, or
If it’s mostly for business, the cents per kilometre method may apply

At the end of the FBT year, you’ll need to calculate the FBT for each vehicle and lodge your return with the Australian Taxation Office (ATO).

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We make FBT reporting easier

How Element can help

Element’s FBT reporting includes:

The vehicle’s base cost
Operating costs
A breakdown of business vs. personal use (as reported by you)
Calculated FBT payable amount

This will give you everything you need to stay compliant and lodge your FBT return confidently.

Financial advisor explaining Fringe Benefits Tax reporting to a customer.

Electric Vehicle (EV) FBT exemption

As part of the push to reduce carbon emissions, the Australian Government now offers an FBT exemption for eligible electric and low-emission vehicles.

You do not pay FBT if you provide private use of an electric car that meets all the following conditions:

The car is a zero or low emissions vehicle
The first time the car is both held and used is on or after 1 July 2022
The car is used by a current employee or their associates (such as family members)
Luxury Car Tax (LCT) has never been payable on the importation or sale of the car.

Young woman with smartphone waiting while her electric car charges in her home charging station.

Want better fleet FBT reporting?

If you’d like help understanding your FBT obligations or setting up fleet FBT reporting, Element is here to support you.

Call us on 1800 812 681 Email us