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Fringe Benefits Tax Time is Almost Here – Is Your Business Ready?
As the Fringe Benefits Tax (FBT) year comes to a close on 31 March, now is the perfect time to ensure your business is prepared. Whether you’ve provided your employees with perks like company cars, entertainment, or discounted loans, FBT could apply — and missing key obligations can lead to unnecessary headaches (and penalties!) down the track.
Here’s a simple guide to help you stay ahead of your FBT responsibilities this year.
What is Fringe Benefits Tax (FBT)?
FBT is a tax employers pay on certain benefits they provide to their employees or their employees’ families. These benefits can be in addition to, or instead of, salary or wages.
Common fringe benefits include:
- Company cars for private use
- Entertainment (such as meals, drinks, or event tickets)
- Employee discounts
- Loans provided at reduced interest rates
- Housing benefits
If you’ve provided any of these, there’s a good chance FBT applies to you.
What You Should Be Doing Right Now
1. Review the Benefits You’ve Provided
Start by checking if you’ve given your employees any fringe benefits during the FBT year (1 April 2024 – 31 March 2025). Don’t forget to include benefits provided by third parties (like through a related company or contractor).
2. Check for Exemptions & Reductions
Some benefits might be exempt (like work-related items such as laptops) or eligible for reduced FBT through methods like the “minor benefits exemption” (under $300 value). Knowing these can help lower your FBT bill.
3. Keep Accurate Records
Good record-keeping is key. Ensure you have documentation that shows the benefits provided, how their taxable value was calculated, and any exemptions applied. The ATO often looks for detailed logs (especially for cars and entertainment).
4. Understand ATO’s Current Focus Areas
This year, the ATO is paying extra attention to:
- Motor vehicle fringe benefits: Are you correctly recording private usage?
- Employee contributions: Have you properly accounted for any repayments employees made to reduce FBT?
- Exemptions and reductions: Are you applying the correct rules?
Key FBT Dates to Remember
- FBT year ends: 31 March 2025
- Lodgment and payment due: 21 May 2025, unless your tax agent lodges your return electronically – in this case, the due date is generally 25 June (you must be an FBT client of the tax agent by 21 May)
How We Can Help
Navigating FBT can be complex, but you don’t have to do it alone. Our team at Mead Partners can help you:
- Review your benefits
- Ensure compliance with ATO guidelines
- Identify any opportunities to minimise your FBT liability
Need assistance? Contact us today to schedule a free FBT review before the deadline! Book a meeting now!
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