The FBT 2025–26 year runs from 1 April to 31 March, with the current year ending on 31 March 2026.
As the deadline approaches, now is the time for businesses to review any benefits provided to employees and ensure they are meeting their Fringe Benefits Tax (FBT) obligations.
Understanding your FBT 2025–26 obligations early can help you avoid unexpected costs and ATO scrutiny.
What is FBT?
FBT applies to non-cash benefits provided to employees or their associates in connection with their employment.
These benefits are often provided in addition to salary and can form part of an employee’s overall remuneration package.
Most common FBT triggers
Many businesses don’t realise they are providing fringe benefits. Some of the most common examples include:
- Company vehicles available for private use
- Meals, drinks or entertainment
- Reimbursed personal expenses
- Employee discounts
- Car parking
If your business provides any of these, you may have an FBT obligation.
Key FBT 2025–26 updates
Electric vehicles
Some electric vehicles may be FBT exempt if they meet certain criteria. However, even where an exemption applies, the value of the benefit may still need to be reported.
From 1 April 2025, plug-in hybrid vehicles are no longer eligible for the exemption unless specific conditions are met.
Work-from-home equipment
Items such as laptops and mobile phones are generally FBT exempt when primarily used for work.
However, employers should ensure that the equipment is genuinely provided for employment purposes.
Contractor vs employee arrangements
FBT generally applies to employees, not genuine contractors. However, the ATO continues to focus on correct classification of workers, so it is important to ensure arrangements are properly documented.
Reduced record keeping requirements
From 1 July 2024, businesses may be able to use existing business records instead of maintaining separate FBT documentation in some cases, reducing the compliance burden.
ATO focus areas
The ATO continues to focus on common problem areas, including:
- Entertainment claimed as a deduction without recognising FBT
- Incorrect employee contribution arrangements
- Businesses not lodging FBT returns
Practical tips before 31 March
To make the FBT process smoother, consider the following:
- Take odometer readings at close of business on 31 March
- Review any staff gifts or vouchers provided during the year
- Check how entertainment expenses have been treated
- Ensure records are up to date
Need help with your FBT obligations?
If you’re unsure whether your business has an FBT liability, it’s important to review your position before the deadline.
We can help you:
- identify fringe benefits
- minimise your FBT exposure
- prepare and lodge your FBT return
