Do You Need to Lodge an FBT Return This Year?

The fringe benefits tax year runs from 1 April to 31 March — and if your business provided any non-cash benefits to employees or their family members during that period, an FBT return may be due. The lodgement deadline is 21 May, so now is the time to check whether this applies to you.

What is fringe benefits tax?

Fringe benefits tax, or FBT, is a tax paid by employers on certain benefits they provide to employees, associates of employees, or directors — in addition to, or instead of, salary and wages. The current FBT rate is 47%, which is aligned with the top marginal income tax rate. It is separate from income tax and is calculated on the grossed-up taxable value of the benefits provided.

It is worth noting that FBT is an employer obligation, not an employee one. The employee receives the benefit, but it is the employer who is responsible for calculating, reporting, and paying the tax.

Which benefits commonly trigger FBT?

The most common fringe benefits that create an FBT liability include company cars used for private purposes, car parking provided at or near a workplace, entertainment such as meals, functions, and tickets to events, low or no-interest loans to employees, and living away from home allowances. Housing provided to employees is also a common trigger, particularly in remote locations or when relocating staff.

Not all benefits are subject to FBT. Some are exempt — for example, certain work-related items such as laptops, mobile phones, and tools of trade used primarily for work. Minor benefits with a taxable value under $300 may also be exempt, provided they are provided on an irregular and infrequent basis. Understanding which benefits fall in or out of the FBT net is essential before you conclude that no return is required.

Reportable fringe benefits on payment summaries

If an employee receives fringe benefits with a total grossed-up taxable value exceeding $2,000 in the FBT year, the employer must record a reportable fringe benefits amount on the employee’s income statement. This amount does not increase the employee’s income tax liability directly, but it is taken into account for certain income tests — affecting things like Medicare Levy Surcharge eligibility, HECS-HELP repayments, and government benefit calculations. Employees should be aware of this if it applies to them.

What you need to do before 21 May

If your business has provided fringe benefits during the 2025–26 FBT year, you need to calculate the taxable value of those benefits, prepare and lodge your FBT return, and pay any FBT owing by 21 May 2026. If you are lodging through a registered tax agent, an extended due date of 25 June 2026 may apply. Even if you do not owe any FBT — for example, because all benefits were exempt — it is worth reviewing your position to ensure you are not inadvertently missing an obligation.

If your business has not provided any fringe benefits and you have previously lodged an FBT return, you may need to advise the ATO that you are no longer required to lodge. Your accountant can help you confirm this and make sure your obligations are fully met before the deadline.

FBT is one of the more complex areas of tax compliance — the rules around what is and is not taxable can be tricky, and the cost of getting it wrong can be significant. If you are not sure whether you need to lodge a return, get in touch with us before the 21 May deadline.