Staying Ahead of FBT

Key Areas to Review Before 31 March 2025

The Fringe Benefits Tax (FBT) year ends on 31 March 2025, so now is the time for businesses to review any non-cash benefits they’ve provided to employees or associates.

Fringe Benefits Tax can apply when your business provides perks beyond regular salary or wages, such as a company vehicle, event tickets, or paying personal expenses. These benefits can create tax obligations if not reported correctly.

Below, you will find information on three common FBT risk areas that you should be reviewing before 31 March 2025:

Motor Vehicles Provided to Employees

If your business provides a car that employees use — even if it’s mainly for work — it’s essential to check for private use, including commuting from home to work. Even if a car stays at an employee’s home and isn’t driven, it may still be considered available for private use under the FBT rules.

There are two main ways to calculate FBT on motor vehicles:

• Statutory formula method: A fixed percentage based on the car’s value

• Operating cost method: Based on running costs and business vs private use (requires a valid logbook)

  
  

If using the logbook method, check that your records are current. Logbooks are valid for five years but must reflect actual usage. If travel patterns have changed, a new logbook may be needed.

Important points to remember:

• Odometer readings must be recorded as of 31 March 2025. This applies to all vehicles, regardless of which method is used. Make sure you capture this on time—it’s essential for FBT reporting.

• FBT can be reduced if an employee contributes to the private use of the vehicle, such as reimbursing the business for the private use component or personally paying for fuel or running costs. We can help calculate the appropriate contribution amount.

• Certain electric vehicles (EVs) may be exempt from FBT if they meet the criteria of being under the luxury car tax threshold and first held after 1 July 2022.

• Even if an EV is exempt, the benefit must be calculated as a reportable fringe benefit for the employee’s income statement.

Entertainment and Gifts for Staff

Celebrating wins or thanking staff with gifts is great for morale, but FBT may still apply.

Entertainment—like meals, drinks, events, or recreation—is generally subject to FBT when provided to employees or their associates. However, some exemptions may or may not apply.

• Non-entertainment gifts (wine, hampers, gift cards) may be exempt if they cost under $300 and are given infrequently.

• Entertainment gifts (like tickets to concerts) usually attract FBT.

For staff functions like Christmas parties, FBT depends on:

• Location and timing: On-site during work hours may be exempt

• Cost per person: Under $300 may qualify for an exemption

We encourage you to review your entertainment and gift expenditure to ensure it is FBT exempt. If you have considerable entertainment costs, please contact us to discuss your obligations under the FBT rules. Remember, it is important for employers to:

• Keep records of entertainment benefit types, costs and recipients (i.e. clients or staff)

• Assess each benefit individually for exemptions

By planning, your business can reward your team while managing FBT risk.

Loans or Expense Payments for Employees

If your business lends money to employees or pays personal expenses (like school fees or subscriptions), these may be fringe benefits. Remember:

• Employee loans below the ATO benchmark interest rate may attract FBT

• Expense payments may be exempt if the expense would’ve been tax-deductible to the employee

Review any loans or expense payments carefully to avoid unexpected liabilities.

FBT Action Checklist

We recommend you review your FBT risk before 31 March 2025, using the following table to help:

Area	Action Item
Motor Vehicles	Review company vehicles provided to staff
	Ensure odometer readings are captured as at 31 March 2025
	Check for valid and current logbooks
	Identify any employee contribution calculations required and consider any expenses paid personally by the employees
	Review electric vehicle eligibility and reporting requirements
Entertainment & Gifts	Review entertainment and gift expenditure for FBT implications
	Consider the minor benefits exemption where appropriate
	Keep records of costs, recipients, and benefit types
	Assess staff functions (location, cost, attendees) individually
Loans & Expenses	Check for employee loans and whether interest has been charged
	Review reimbursed personal expenses or expenses paid on an employee’s behalf for deductibility
General	Review all benefits for potential FBT liability
	Ensure all FBT reporting and calculations are completed by 31 March

Let Us Help You Stay Ahead of FBT

FBT is often overlooked but can lead to tax and compliance issues if not managed correctly.

Contact our team today if anything here sounds familiar or if you’re unsure about your FBT obligations. We’ll help you review your situation and ensure everything’s in order before 31 March.