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FBT is paid by employers, not employees, on non-cash benefits provided to staff — cars, car parking, entertainment, loans, expense payments. It runs on its own year, 1 April to 31 March, and is levied at 47%, matching the top marginal rate plus Medicare levy. That rate is deliberate: it removes the incentive to pay someone in benefits instead of salary.
FBT is calculated on the grossed-up value of the benefit, which represents the pre-tax salary an employee would have needed to buy it themselves. There are two rates: Type 1 (2.0802) where the employer can claim GST credits on the benefit, and Type 2 (1.8868) where it can't. So a $1,000 Type 2 benefit grosses up to $1,886.80, and FBT at 47% is about $886 — nearly as much as the benefit itself.
Car fringe benefits can be valued two ways. The statutory formula applies a flat 20% to the car's base value regardless of how it's used; the operating cost method taxes the private-use percentage of actual running costs, which requires a valid logbook but usually wins where business use is high. Employers can choose whichever produces the lower taxable value.
Eligible battery electric cars below the fuel-efficient luxury car tax threshold currently attract a full FBT exemption, which is why EV novated leases have been so attractive. Plug-in hybrids stopped qualifying for new arrangements from 1 April 2025 — only arrangements already in place and continuously maintained keep the exemption. From 1 April 2027 the full exemption applies only to EVs valued at $75,000 or less; above that (and below the LCT threshold) a 25% discount applies instead, and from 1 April 2029 the 25% discount becomes the general regime. Arrangements keep the treatment that applied when they commenced, so timing matters.
Are there exempt benefits? Yes — work-related portable electronic devices, protective clothing, and minor benefits under $300 provided infrequently are common exemptions.
Does FBT show on my payment summary? Reportable fringe benefits above the threshold appear on your income statement and count toward income tests for things like the Medicare levy surcharge and family assistance, even though you don't pay income tax on them.
This calculator uses current published rates from Australian government and regulator sources. The result is an estimate for general guidance — it does not constitute personal financial advice. For decisions about your circumstances, consult a registered financial adviser, tax agent, or other professional. See editorial standards for how DecisionLab sources and updates its calculator data.