A summary of the different categories of fringe benefits;
List of common FBT exemptions and concessions;
Information regarding the disclosure of Reportable Fringe Benefits; and
Questionnaires regarding particular benefits that might be provided to employees.
The Pitcher Partners Fringe Benefits Tax (“FBT”) Guide 2025 is to be used as a general guide to assist employers in determining their FBT Liability. Although the FBT Guide 2025 is comprehensive, it is not intended to be exhaustive and is provided on the terms and understanding that Pitcher Partners are not responsible for the results of any actions taken on the basis of the information contained within it, nor for any error in or omission from the information contained within the FBT Guide 2025. Employers should obtain specific advice prior to lodging their annual FBT return.
Do you provide any of the following benefits for your employees? If so, these may have FBT implications:
Common Benefits Provided
Accommodation
Car Benefits
Car Parking Benefits
Childcare
Laptop Computers
Loans – Low or Interest Free (or subsequent forgiveness of debt)
Entertainment Benefits
Long Service Leave Awards
Mobile Phones
Relocation Costs
Travel Expenses
Gift Vouchers
If any of the above benefits are being provided to employees, please contact your PP advisor to discuss any FBT implications.
Recent Developments
FBT Exemption for Electric Cars
A reminder that for qualifying electric cars first held and used after 1 July 2022, employers do not have to pay FBT on the car and associated car expenses provided as part of a car benefit.
To qualify, the vehicle must be a ‘car’ for FBT purposes, be a zero or low emissions vehicle, be used by a current employee or their associates, and at a value for which luxury car tax (LCT) has never been payable on importation or sale ($91,387 threshold for the 2025 income year).
A zero or low emissions vehicle can include:
A battery electric vehicle
A hydrogen fuel cell electric vehicle, or
A plug-in hybrid vehicle
Where the car qualifies to be exempt from FBT, the benefit will continue to be a Reportable Fringe Benefit for the purpose of accessing means tested benefits and for Government impositions.
However, note that plug-in hybrid electric vehicles first used, or available for use, after 1 April 2025 will no longer be considered zero or low emissions vehicles and as such won’t be eligible for the electric cars exemption. If the vehicle is first used, or available for use, before 1 April 2025, and the financially binding arrangement with the employee is unchanged, it will continue to be exempt. The exemption will continue to apply as there is a preexisting commitment to provide the benefit.
Employers should consider whether their motor vehicle policy needs to be updated or a new policy created to avail themselves of this new exemption.
Note:
Associated costs such as the provision of home charging stations, GPS subscriptions etc., are considered separate benefits and are likely to be subject to FBT.
The provision of the use of charging facilities on an employer’s premises for a vehicle owned by an employee is likely to be considered a taxable residual benefit.
Electric car charging costs: shortcut method
The Commissioner’s guidance in PCG 2024/2 continues to apply, which provides a shortcut method for calculating the cost of charging an eligible electric vehicle at an employee’s home.
A rate of 4.20 c/km continues to apply for the 2025 FBT year that may be used for calculating charging costs incurred.
Note, this method is unavailable for plug-in hybrid electric vehicles, electric scooters and electric motorcycles. New guidance is expected to be released this calendar year to assist with calculating these costs for plug-in hybrid electric vehicles.
Commercial Car Parking Facilities
A recent Federal Court Ruling, Toowoomba Regional Council v FC of T (2025), has considered whether a car parking facility is to be considered a “commercial parking station”.
It was held that a shopping centre car parking facility (e.g. a penalty-style car park) may not be considered a commercial parking station for FBT purposes. This provides a contradictory outcome to the Commissioner’s view in TR 2021/2.
Employers should carefully consider the impact of the Federal Court Ruling and the extent to which it may apply to their specific circumstances.
Record Keeping Requirements
From 1 April 2024 (2025 FBT year), the Commissioner’s discretion as to alternative record keeping requirements comes into effect.
Employers now have a choice, for certain benefits, to use alternative existing business records in place of current approved forms such as employee declarations and travel diaries. When choosing to use the alternative records option, the minimum record keeping requirements must be satisfied by the relevant time.
The alternative records options available to use are detailed in specific Legislative Instruments and are for several benefits (e.g. FIFO, LAFH, travel-related, otherwise deductible, etc).
Summary Main FBT Rates and Thresholds – 2025 FBT Year
per employee per FBT year Long Service Leave Awards $1,000 for 15 years of service, plus $100 for each additional year of service
Capping Thresholds for FBT Reportable and FBT Exempt Employers – 2025 FBT Year
Categories of Fringe Benefits
Below is a brief summary of the types of benefits dealt with under the Fringe Benefits Tax (FBT) Legislation. If you believe one or more applies to benefits you provide, please contact your PP advisor to consider your FBT obligations. There are twelve categories of fringe benefits (eleven specific categories and a residual category). The categories are as follows:
1. Car Benefits
A car benefit arises on any day a car owned or leased by the employer is used or is available for private use by an employee. A car is any vehicle designed to carry a load of less than one tonne or fewer than nine passengers and includes utes and panel vans. Private use includes travel between home and work and whenever the vehicle is under the control of the employee (for example, a benefit exists where the car is garaged at or near the employee’s home. Even though the car may not move for several weeks, you may continue to pay tax thereon!). Any contribution to running expenses by the employee reduces FBT.
Car benefits assessed using the operating cost method (excluding leased vehicles) include notional depreciation and interest calculations. The relevant depreciation rates for the 2025 FBT year are:
Date of Vehicle Purchase
Notional interest calculations for the 2025 FBT are based on a 8.77% interest rate.
Car benefits provided in relation to qualifying electric cars are exempt from FBT (but remain reportable fringe benefits) subject to satisfying the relevant conditions.
2. Loan Fringe Benefits
A loan fringe benefit will arise where an employee is loaned money at an interest rate less than the statutory interest rate. The statutory interest rate is prescribed by the Australian Taxation Office and for the FBT year commencing 1 April 2024 was 8.77% p.a. The taxable value of a loan fringe benefit may be reduced where the employee utilises the funds partly or wholly for an income producing purpose.
3. Debt Waiver
A debt waiver fringe benefit arises where you waive a debt previously owed by the employee to the employer.
4. Expense Payment Benefit
An expense payment benefit arises where an employer pays or reimburses expenses incurred by an employee. The taxable value of an expense payment benefit is reduced by:
any contribution paid by the employee; and where such expenses would otherwise be deductible had the employee incurred the expense themselves and declared them in their own tax return.
Please note, expenditure which is deductible to an employee must be supported by a written declaration given by the employee to the employer. We can provide you with examples of declarations which comply with Australian Taxation Office guidelines if required.
5. Housing Fringe Benefit
A housing fringe benefit will arise where an employer grants an employee a right to occupy or use a unit of accommodation as a usual place of residence. Such accommodation could be a house, a flat, a unit, hotel, motel, guesthouse, ship, oil rig, caravan etc.
Where the accommodation is not the employee’s usual place of residence, then a housing benefit does not arise, but it may be taxable as a residual benefit (see below).
Special rules apply where housing benefits are provided in remote areas.
Once again, the taxable value is reduced by any employee contribution to the employer.
6. Living Away From Home Allowance (LAFHA)
The usual rule is that allowances are not taxable fringe benefits as they are included in the employee’s salary and taxed in their return.
However, LAFHA is the only exception to the rule and relates to payments by an employer to an employee as an allowance to compensate additional expenses suffered because the employee has to live away from his or her usual place of residence for employment purposes.
The concessional FBT treatment of LAFHA and benefits relates to employees who maintain a residence in Australia for their own use and in which they usually reside.
The concessional treatment is limited to a period of 12 months for an employee at a particular work location. We recommend you contact your PP advisor to discuss the potential implications should you be paying your employees a LAFHA.
7. Airline Transport
These benefits are relevant for airline operators and travel agents. They arise where an employee receives a benefit consisting of transport in a passenger aircraft and any incidental services. A benefit can arise when discounted air travel is provided by an airline to an employee of a travel agent under an arrangement between the travel agent and the airline.
8. Board Fringe Benefits
A board benefit arises where an employee is entitled under an industrial award or employment arrangement to accommodation and to at least two meals a day. There are concessional rules for valuing such benefits which generally apply to meals provided to shearing workers, employees on a ship or oil rig etc.
9. Property Fringe Benefits
A property benefit arises where the employee receives property supplied by the employer.
Property includes tangible or intangible assets such as real property, shares, gas, electricity etc. Once again, the taxable value is reduced by:
any employee contribution; and
the amount the employee could have claimed as a tax deduction.
10. Car Parking Benefits
Car Parking benefits applies to car parking facilities provided by an employer to an employee in respect of employment on “business premises”
or “associated premises” of the provider. The parking provided must be within one kilometre of a commercial parking station and be for more than four hours between 7am to 7pm on the particular day.
An exemption exists for car parking benefits provided if all the following conditions are satisfied:
the car is not parked at a commercial parking station;
the employer is neither a public company nor a subsidiary of a public company;
the employer is not a government body of a State or Territory; and
the employer was either:
a small business entity for the last income year before the start of the FBT year (assuming aggregated turnover was less than $50m); or the employer’s gross total income is less than $10m for that income year.
11. Meal Entertainment Fringe Benefits
A meal entertainment benefit arises where an employer provides a meal entertainment benefit to the employee. Meal entertainment generally consists of:
a) entertainment by way of food or drink; b) travel or accommodation in connection with (a); or
c) the reimbursement of payment of expenses incurred in providing (a) or (b).
To assist in determining if you do provide entertainment, we enclose a table on pages 10 -12 provided by the ATO which summarises common situations and whether it is considered entertainment.
12. Residual Benefits
Residual benefits arise where a fringe benefit is provided to an employee by the employer and the benefit does not fall in any of the above categories.
Please note, the provision of any of the above benefits to an associate of an employee will usually be subject to FBT. Furthermore, benefits provided by an associate of the employer or by a third party under an arrangement with the employer will be subject to FBT.
Entertainment Table
Key ME = Meal Entertainment
R Reportable fringe benefit
Y Yes N No
Y/N Depending upon what is provided, food or drink may or may not amount to the provision of meal # an income taxable employer has the option to claim a deduction for the cost of the meal and include $30 in their assessable income – section 32-70 of the ITAA.
Note in relation to reportable fringe benefits the table includes a column indicating whether the benefit is ‘reportable’. Reportable fringe benefits received by associates of the employee are reportable to the employee.
Extract from Taxation Ruling TR97/17
(ii) …. By associates
Extract from Taxation Ruling TR97/17
Extract from Taxation Ruling TR97/17
Extract from Taxation Ruling TR97/17
Fringe Benefits Tax – Common Exemptions
There are an array of exemptions and concessions provided in the Fringe Benefits Tax Assessment Act 1986 These are categorised into miscellaneous exemptions and miscellaneous reductions and concessions.
1. Exemptions
The following are the more common benefits which are exempted from Fringe Benefits Tax:
a) Employment Interview costs including airfares, cost of interviews, etc.
b) Relocation Expenses – Certain costs relating to the movement of an employee from one locality to another for employment purposes.
c) Certain work-related items including portable electronic devices, items of computer software, items of protective clothing, briefcase and tools of trade. Examples of portable electronic devices include a mobile phone, calculator, personal digital assistant, laptop, portable printer and portable global positioning system (GPS) navigator receiver.
Eligible work-related items acquired must primarily be for use in the employee’s employment to qualify for the exemption. The onus is on the employer to have a reasonable basis to determine that an eligible work-related item is primarily for use in an employee’s employment.
The exemption is limited to one item per FBT year for items that have a substantially identical function, unless the item is a replacement item. An item is a replacement item if the previous item is lost or destroyed or needed replacing because of developments in technology.
Small business entities can provide more than one ‘portable electronic device’ to an employee per FBT year where the items have a ‘substantially identical function’.
d) Membership fees to a trade or professional journal or organisation, corporate credit card or an airport lounge.
e) Taxi travel in respect of sick employees or trips which start or end at the place of employment. Note: Uber is not recognized as a ‘vehicle that is licenced to operate as a taxi’.
f) Minor benefits – Benefits with a value less than $300, having regard to various matters such as infrequency and irregularity, it would be unreasonable to treat the benefit as a fringe benefit.
g) Electric Vehicles (EVs) – eligible electric car benefits are exempt from FBT (but remain reportable fringe benefits) subject to satisfying the relevant conditions.
2. Reductions and Concessions
The following are the more common reductions and concessions available to employers:
a) Remote Area Concessions – Housing Fringe Benefits/Housing Assistance/Residential Fuel/ Fly In – Fly Out Arrangements/Remote Area Holiday Travel etc.
b) In-House Benefits – The first $1,000 of the taxable value of an in-house benefit is exempt from FBT. In-house benefits are generally goods, services or other property provided to an employee which are of a kind that the employers sell in the ordinary course of business (e.g. staff discount scheme). Note, the exemption does not extend to gift cards. An employer cannot claim the $1,000 reduction for in-house benefits provided to an employee under a salary sacrifice arrangement.
c) Otherwise Deductible Rule – This rule relates to benefits provided to an employee where had the employee incurred the expenses themselves, they would have been entitled to an income tax deduction. This reduction is valid in respect of provision of the following benefits:
Loan Fringe Benefits;
Property Fringe Benefits;
Expense Payment Benefits;
Residual Fringe Benefits;
Airline Transport Benefits; and
Board Fringe Benefits.
To access many of the exemptions, reductions, and concessions the employer must maintain specific records. For example, written declarations setting out the type of expenditure and declaring that such expenditure would be deductible in their own hands had they incurred the costs themselves. We can assist in ensuring correct documentation is maintained in accordance with ATO guidelines.
Disclosure of Fringe Benefits on Annual Earnings Statements
Certain fringe benefits are to be included in Single Touch Payroll (“STP”) reporting and disclosed on employees’ earnings statement for the financial year ending 30 June 2025.
The earnings statement reporting amounts are used together with the employee’s gross income for the income tests for various Government surcharges, entitlements, and obligations.
Employers will be required to report via STP the grossed-up taxable value (using the gross-up formula of 1.8868) of certain fringe benefits provided to employees during the FBT year, where the value of the benefits provided to an employee exceed $2,000.
It is necessary to allocate benefits between employees. Where many employees share in the one benefit, an appropriate allocation may be necessary between the employees concerned.
Please note, car parking fringe benefits, remote area benefits, non-salary packaged entertainment facility leasing and meal entertainment, are excluded fringe benefits and are not included in the reporting requirements.
An FBT reporting exclusion also applies in respect of pooled or shared cars which give rise to a car benefit for more than one employee. Where this reporting exclusion applies, such car benefits do not count towards the $2,000 FBT reporting threshold for a particular employee and hence, will not be reportable on the employee’s payment summary.
Please ensure employees are identified on respective benefits requiring disclosure so we may advise you of the amounts to report via Single Touch Payroll.
Reminder:
STP Phase 2 reporting changes now require pre-tax salary sacrificed benefits to be disclosed.
Eligible exempt electric cars for FBT purposes remain reportable on annual earnings statements.
Questionnaires
Car Benefits
CAR PARTICULARS
Driver
Model
Is this vehicle an Electric Car? If yes, the following information is still required for Reportable Fringe Benefit Amount reporting purposes.
Registration Number
Date of Purchase
Purchase Price (GST Inclusive) *
Odometer Reading as at 1 April 2024 – New clients
Odometer Reading as at 31 March 2025
Type of Finance (please provide documentation).
Novated Lease
Lease
Hire Purchase
Personal Loan
Cash
Has the vehicle been refinanced during the 2025 FBT year?
If yes, please provide copies of finance documentation.
RUNNING EXPENSES (INCLUDING GST) FOR LOG BOOK METHOD ONLY
Lease Payments (If not lease please provide finance details)
Registration
Insurance
Fuel and Oil / electricity costs
Repairs and Maintenance
Other:
Does the employee personally contribute to the running expenses on the car? If so, please provide details and the amount (GST inclusive).
Purchase price – original GST inclusive cost including any fitted accessories not required for business, including dealer delivery charges, sales tax exemption or dealer discounts, less registration and stamp duty charges.
Car Benefits (Continued)
BUSINESS USAGE
Days not available for private use.
Was a log book maintained Yes/No?
If Yes, is it less than five (5) years old?
If Yes, business use per the log book? *
If Yes, business use per the log book? *
Has the business use of the vehicle changed by more than 10% since the logbook was maintained?
CAR PURCHASES/DISPOSALS
/
/ NO YES / NO YES / NO
If you acquired/disposed of a car used in providing a fringe benefit, please complete the following details and forward copies of purchase, finance, and sales documentation: CAR PARTICULARS
Driver
Model
Registration Number
Date of Purchase/Sale
Odometer Reading at date of Purchase/Sale
Odometer Reading as at 31 March 2025 - if purchased
Amount (inclusive of GST)
Provide Copies of Documentation
* A logbook is required to be kept for a minimum of 12 continuous weeks every five years or if there is a change to the pattern of business use of the vehicle.
Please contact our office if you require a new log book to be sent to you.
Entertainment Benefits
Do you provide entertainment benefits? The term “provision of entertainment” includes the provision of entertainment by way of:
food, drink, or recreation; and
the provision of travel and accommodation connected with or to facilitate such entertainment.
Where entertainment is provided, please advise:
Total entertainment expenditure (GST Inclusive) with detailed descriptions
Of the above, the amount attributable to employees (actual figures only)
Car Parking Benefits
A car parking benefit is taxable where you answer yes to all the following:
(a) A car park is provided to any employee in the vicinity of their employment.
(b) The car park is within one kilometre of a commercial parking station.
YES / NO
Note, there has been recent significant changes to the ATO’s interpretation. YES / NO
(c) A commercial parking station charges more than $10.77 per day. YES / NO
(d) The car is parked for more than four hours between 7am to 7pm. YES / NO
The small business car parking exemption does not apply (see Recent developments section). Note the exemption does not apply where parking is provided in a commercial car park.
If you answered yes to all the above, then complete the table for each car park provided.
Employee/Associate of Employee
Cost of Providing Car Park (including GST)
Number of days car park provided
Where is the car park provided
Does the employee contribute to the cost of the car park? If yes, how much?
On any day during the FBT year were all commercial parking stations located within a 1km radius only offering free all-day parking?
Note that no car parking benefit should arise in this situation. Car parking data may need to be obtained to confirm whether this was the case. Please contact your Pitcher Partners representative to discuss this further.
Did GST apply?
/ NO
/
/
Car Parking Benefits
Expense Payment Benefits
Note: If you keep a computerised accounting package, please email a backup of your current file.
NAME OF EMPLOYEE:
Date expense payment benefit provided:
Description of Expense Payment:
Supplier details (if applicable):
Value of the expense payment benefit (including GST):
Percentage of benefit subject to “otherwise deductible” rule:
NAME OF EMPLOYEE:
Date expense payment benefit provided:
Description of Expense Payment:
Supplier details (if applicable):
Value of the expense payment benefit (including GST):
Percentage of benefit subject to “otherwise deductible” rule:
NAME OF EMPLOYEE:
Date expense payment benefit provided:
Description of Expense Payment:
Supplier details (if applicable):
Value of the expense payment benefit (including GST):
Percentage of benefit subject to “otherwise deductible” rule:
NAME OF EMPLOYEE:
Date expense payment benefit provided:
Description of Expense Payment:
Supplier details (if applicable):
Value of the expense payment benefit (including GST):
Percentage of benefit subject to “otherwise deductible” rule:
Loan Benefits
Did you make a loan to an employee during the year? YES / NO
Did you have an existing loan to an employee in the previous FBT year? YES / NO
IF YOU ANSWERED YES TO THE ABOVE, PLEASE PROVIDE DETAILS: EMPLOYEE 1
Employee’s Name
Purpose of the Loan
Term of the Loan
Employee Contributions (Repayments)
Balance of Loan at 31 March 2025 $ $ $
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