2025/26 Fringe Benefits Tax (FBT) Checklist for Employers

As the lodgement deadline for FBT returns draws near, now is the time to review whether any benefits provided to employees or their associates during the year could give rise to a Fringe Benefits Tax liability.

While your accountant will usually finalise the FBT return using payroll and accounting records, some benefits provided to employees are not always readily apparent from those records alone.

The following general checklist may assist in identifying benefits that should be discussed with your accountant before your return is prepared.

*Please note, this is not an exhaustive list but a practical guide to help employers identify common fringe benefit scenarios.

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Car Fringe Benefits
Meal Entertainment Fringe Benefits
Expense Payment Fringe Benefits
Car Parking Fringe Benefits
Living Away From Home Allowance (LAFHA)
Housing Fringe Benefits
Loan Fringe Benefits
Debt Waiver Fringe Benefits
Residual Fringe Benefits

Car Fringe Benefits

For the purpose of Fringe Benefits Tax, the general definition of a car is … a motor-powered road vehicle built to carry less than nine passengers (including driver) and a load of under one tonne.

Step 1: The Checklist

Did you provide any vehicles to your employees or their associates during the FBT year?

Do you allow vehicles to be used for private purposes, even if primarily used for work?


Are any of your business vehicles currently garaged at an employee’s home?

If so, do any of those vehicles have a carrying capacity of under one tonne and less than nine passengers?

Step 2: Possible Exemptions to Consider

Are any of your vehicles panel vans, utility or similar models primarily designed to transport goods rather than passengers?


Is the vehicle a dual-cab vehicle with a carrying capacity of one tonne or more?

Is private travel for your employees restricted to commuting between place of work/home, and minor, infrequent and irregular use?

2025/26 Electric Vehicle (EV) Requirements

The EV must have been first held by the business from the 1st July 2022.

The GST-inclusive cost must not exceed $91,387.

Note: Plug-in hybrid vehicles generally lost the exemption after the 31st March 2025 unless there was a prior commitment.

Meal Entertainment Fringe Benefits

Entertainment provided to employees may create an FBT liability.

Step 1: The Checklist

Did you provide entertainment through food, drink, recreation, accommodation or travel?


Has your business elected to use the 50/50 split method or the 12-week register method?

Note: If no election is made, the actual method will apply.

If using the register method, does the register include the date, cost, location and persons attending?

Step 2: Possible Reductions to Consider

Did your employee contribute towards the cost of the entertainment?

Note: If so, the taxable value may be reduced.

 

Expense Payment Fringe Benefits

An expense payment fringe benefit arises when an employer pays or reimburses an employee’s expenses.

Step 1: The Checklist

Did your business pay or reimburse expenses incurred by employees?



Were these expenses entirely work-related?

Note: If yes, an expense payment fringe benefit declaration may be required.

Was the reimbursement paid on a cents-per-kilometre basis?

Note: This is generally FBT exempt, although the employee may still be assessed for income tax.

Step 2: Possible Exemptions to Consider

Does the minor benefits exemption apply?



Was the item a work-related item used primarily for employment purposes, such as laptops, mobile phones, tools of trade, software or protective clothing?

Note: Small businesses with aggregated turnover under $50 million may provide multiple portable electronic devices in some circumstances.

Did your business provide reimbursements for professional memberships, journals, airport lounge memberships, business-related newspapers or emergency assistance expenses?

Car Parking Fringe Benefits

A car parking fringe benefit may arise when parking is provided to employees at or near the workplace.

Step 1: The Checklist

Does your business provide either on-site car parking or at an associated location for your employees?

Is there a commercial parking station situated within one kilometre of that parking site?

Does the all-day parking fee at that site exceed $11.03 (2025/26 threshold)?


Is the car parked for more than four hours between 7.00 am and 7.00 pm?


Is the car used for travel between home and work on that day?


Does your business provide parking because of the employee’s employment?

Step 2: Small Business Exemption

Does the business have gross turnover under $10 million or aggregated turnover under $50 million?

Note: If so, the business may be exempt from car parking FBT unless parking is provided in a commercial parking facility.

Living Away From Home Allowance (LAFHA)

LAFHA benefits may arise where employees are required to live away from their usual residence to perform employment duties.

Step 1: The Checklist

Did your business pay an employee a Living Away From Home Allowance?

Has documentation been obtained to support accommodation and food costs?


Have you received employee declarations before lodgement of the FBT return?

Note: Employers must generally retain these records for five years.

Step 2: Relocation Costs to Consider

Did your business provide relocation costs to employees? These could include, the relocation and storage of household goods, relocation consultants, home purchase or sale costs, utility connections or travel during relocation?

Note: These may often be exempt from FBT.

Housing Fringe Benefits

A housing fringe benefit may arise where an employer provides accommodation to an employee.

Step 1: The Checklist

Has your business provided an employee with the right to occupy accommodation as their usual residence?

Is the accommodation located in a remote area, which may provide an exemption?

Has the employee contributed towards the cost of the accommodation?

Note: If so, the taxable value may be reduced.

Loan Fringe Benefits

A loan fringe benefit may arise where an employer provides a loan to an employee or their associate.

Step 1: The Checklist

Has a loan been made to an employee or their associate?


Was the loan provided in respect of the employee’s employment?


Do you know the loan amount, date and purpose?


Is the interest rate below the benchmark rate of 8.62% for 2025/26?

Step 2: Possible Exemptions to Consider

Does the loan comply with Division 7A loan requirements?


Is the loan treated as a deemed dividend under Division 7A?


Is the loan simply an advance for employment-related expenses to be incurred within six months?

Debt Waiver Fringe Benefits

A debt waiver fringe benefit arises where an employer releases an employee from repaying a debt.

Step 1: The Checklist

Has your business forgiven an outstanding debt owed by an employee or their associate?


Is the debt forgiveness treated as a deemed dividend under Division 7A?

Does the waiver represent a genuine bad debt?

Note: If so, it may be exempt from FBT.

Residual Fringe Benefits

Residual fringe benefits apply where a benefit provided to an employee does not fall into another specific FBT category.

Step 1: The Checklist

Does your business offer any other benefits to employees not covered above?

Does the minor benefits exemption apply to these items?


Was the benefit primarily work-related?

Need Help With Your FBT Obligations?

This checklist is intended to help you as employers identify potential fringe benefits before lodging your FBT return. However, because the law is complex and correct treatment depends on your specific circumstances, it’s advisable to discuss them with your accountant or adviser.

If you’re unsure whether any of the above applies to your business, or would like assistance preparing or reviewing your Fringe Benefits Tax return, the team at DSV is here to help.

Contact DSV to discuss your situation and ensure your business remains compliant while taking advantage of any available exemptions.