2025 FBT obligations for employers: Your Essential Checklist

2025 FBT obligations for employers: Your Essential Checklist

With the FBT return deadline fast approaching, it’s important for employers to understand where fringe benefits may apply within their business. While your accountant will usually handle the preparation, some benefits may not be immediately visible in your records, so this checklist is designed to help you spot them early.

Car Fringe Benefits

A car fringe benefit arises if a vehicle is made available for private use by an employee — either through actual use or if it’s garaged at home. Vehicles carrying less than one tonne and fewer than nine passengers are considered “cars” for FBT purposes.

Check:

• Was a car provided to employees or their associates?

• Was it used or available for private use?

• Does it qualify for exemption (e.g., panel van, electric vehicle, limited private use)?

✅ Tip: Electric vehicles (EVs) may be exempt if first held from 1 July 2022 and cost under the luxury car tax threshold of $91,387.

️ Car Parking Fringe Benefits

A car parking benefit may arise if an employee parks at or near their workplace and nearby commercial car parks charge over $10.77/day (for 2024–25).

Conditions include:

• Car parked more than 4 hours between 7am–7pm

• Parking provided at or near the employee’s main workplace

• Commercial car park exists within 1km radius

✅ Exemption: Small businesses with turnover under $50 million are exempt, unless using commercial parking stations.

Loan & Debt Waiver Fringe Benefits

If an employer lends money to an employee at an interest rate below the benchmark (8.77% for 2024–25), a loan fringe benefit may apply.

Forgiving an employee’s debt may also trigger a fringe benefit, unless it’s a genuine bad debt or falls under Division 7A rules.

Expense Payment Fringe Benefits

These arise when employers pay or reimburse an employee’s private expenses.

✅ Exemptions apply if:

• The item is work-related (e.g. mobile phone, software, tools of trade)

• Reimbursement is on a cents-per-km basis

• Minor benefits exemption applies

• Subscriptions or emergency assistance is provided

Living-Away-From-Home Allowance (LAFHA) & Relocation Benefits

A LAFHA benefit may apply if an employee is compensated for being away from home for work. Records must be kept for accommodation and food, or an employee declaration must be submitted.

✅ Relocation expenses such as removal costs, utilities, and travel to the new location may be exempt from FBT.

️ Meal Entertainment & Property Fringe Benefits

These arise when food, drink, or related entertainment is provided. Employers can use:

• 50/50 split method

• 12-week register method

• Actual method with supporting records

Property benefits include tangible/intangible items like gifts or devices.

✅ Exemptions exist for minor benefits and work-related items provided primarily for employment use.

Residual & Tax-Exempt Body Entertainment Fringe Benefits

Residual fringe benefits cover anything not classified under other categories. If it’s work-related (e.g., laptops or tools), it may be exempt.

Charities and non-profit bodies may trigger a separate tax-exempt body entertainment benefit, especially if non-deductible entertainment is provided.

FBT Rebate for Eligible Employers

Certain not-for-profits (e.g. charities, community orgs, religious institutions) may receive a 47% rebate on their FBT liability, capped at $30,000 per employee.

✅ Ensure your organisation is endorsed by the ATO as a rebatable employer.

Need Help Navigating Your FBT Obligations?

We’re here to help you identify and report fringe benefits accurately — and take advantage of available exemptions. 2024–25 FBT obligations for employers

WL Advisory is a Chartered Accounting firm. We specialise in accounting, tax, and advisory services for individuals and small businesses. Please visit our website for more information. 2025 FBT obligations for employers: Your Essential Checklist

Learn more directly from the ATO:
ATO – Fringe benefits tax