Small Business Tax Dictionary
Fringe Benefits Tax (FBT) — Australia
Fringe Benefits Tax (FBT) is an Australian tax levied on certain non-cash benefits that employers provide to employees or associates. The employer bears responsibility for FBT payments, and it operates independently from standard income tax.
What benefits are subject to FBT?
Common fringe benefits subject to FBT in Australia include:
- Company vehicle usage — when a vehicle is made available for private use by an employee or their family
- Entertainment expenses — such as meals, events, or holidays provided to employees
- Low-interest or interest-free loans — loans at rates below the benchmark interest rate set by the ATO
- Expense payments — where the employer pays for something that is a private expense of an employee
How FBT works
The FBT year runs from 1 April to 31 March. Employers must:
- Identify all fringe benefits provided during the year
- Calculate the taxable value of those benefits
- Lodge an FBT return and pay any FBT owing to the Australian Tax Office (ATO)
Why FBT compliance matters
Proper FBT administration supports transparent employment practices and ensures organisations remain aligned with Australian tax regulations. Benefits provided to employees have real tax implications — ignoring FBT obligations can result in significant penalties.