FBT
Last reviewed 13 June 2026 by Nick Lim, finance broker (FBAA).
FBT, fringe benefits tax, is a tax employers pay on certain non-cash benefits given to employees, such as a practice car, entertainment or private expenses. The FBT year runs from 1 April to 31 March, separately from the income tax year. For practice owners it affects how vehicles and other benefits are structured and financed, and it interacts with how income and packages are arranged.
Why FBT Matters
FBT changes the real cost of giving employees non-cash benefits, which shapes how practices structure cars and packages.
- Tax on non-cash employee benefits
- Paid by the employer, not the employee
- Commonly applies to a practice vehicle
- FBT year runs 1 April to 31 March
- Affects how benefits are structured
Common Features of FBT
- Applies to cars, entertainment and private expenses
- Separate FBT year
- Employer lodges an FBT return
- Can be reduced by employee contributions
- Interacts with salary packaging
Official reference: ato.gov.au
What is FBT?
Fringe benefits tax, paid by employers on certain non-cash benefits given to employees.
What benefits attract FBT?
Common ones include a practice car, entertainment and private expenses paid by the business.
When is the FBT year?
It runs from 1 April to 31 March, separate from the income tax year.
How can FBT be reduced?
Through employee contributions, exemptions and careful structuring of benefits.
Does FBT affect car finance?
Yes, it influences how a practice vehicle is financed and packaged.