Fringe Benefits Tax in Australia: What It Means for Your Tax Return
Fringe benefits tax (FBT) is paid by your employer, not you, on non-cash perks like a work car or a cheap loan. But if the taxable value of your benefits tops $2,000 in an FBT year, a reportable fringe benefits amount lands on your income statement and can affect your HECS repayments, Medicare levy surcharge and other tests.
What Is Fringe Benefits Tax and Who Actually Pays It?
Fringe benefits tax is a tax employers pay on certain non-cash benefits they give to employees, currently at a flat 47% rate on the grossed-up value of the benefit. It runs on its own FBT year, from 1 April to 31 March, which is different from the 1 July to 30 June income tax year most Australians lodge against. Your employer is the one who registers for FBT, works out the taxable value of any benefits provided, lodges an FBT return and pays the tax to the ATO. As an employee, you are never billed for fringe benefits tax directly, so you will not see an FBT line item or a bill addressed to you.
What Kinds of Benefits Actually Attract FBT?
FBT can apply to almost any non-cash perk your employer provides on top of your salary, from a work car to a cheap loan or paid-for entertainment. The ATO groups taxable fringe benefits into a handful of categories: cars and other vehicles (including car parking and road tolls), entertainment such as food, drink or recreation, expense payments made on an employee's behalf, loans and debt waivers, accommodation and relocation benefits such as living-away-from-home allowances, property given to an employee, and a catch-all “residual benefits” category for anything else. Many employers reduce or avoid FBT altogether by using salary sacrifice arrangements or exemptions on certain work tools and devices, so not every perk ends up being taxable.
What Is a Reportable Fringe Benefits Amount?
If the taxable value of the fringe benefits you personally received is more than $2,000 in an FBT year, your employer must report a grossed-up reportable fringe benefits amount (RFBA) on your income statement. The $2,000 test is based on the taxable value of the benefits, not the grossed-up figure. Once you are over that threshold, the whole amount is grossed up using the lower, type 2 rate, regardless of which gross-up rate your employer actually used to calculate its own FBT. You are not taxed on your RFBA. It is shown on your income statement, or payment summary, purely so the ATO and other agencies can use it in various income tests, and it appears at label IT1 if you ever lodge on paper.
Fringe Benefits Tax: Key 2025-26 Figures
Item | Amount or rate |
FBT rate | 47% of the grossed-up taxable value |
FBT year | 1 April to 31 March |
Type 1 gross-up rate | 2.0802 |
Type 2 gross-up rate | 1.8868 |
Reportable fringe benefits threshold | $2,000 (taxable value) |
How Does a Reportable Fringe Benefits Amount Affect My Tax Return?
Even though your RFBA is not taxed, the ATO adds it back into several income tests that can change what you owe or receive elsewhere. According to the ATO, a reportable fringe benefits amount can be used to work out your Medicare levy surcharge liability, your eligibility for the private health insurance rebate, whether you are liable for Division 293 tax on super contributions, your eligibility for super co-contributions and the low income super tax offset, and your repayment income for HECS, HELP and other study and training support loans. It can also affect family assistance payments such as Family Tax Benefit and the Child Care Subsidy, and your child support obligations. If your income sits near the Medicare levy surcharge thresholds for your situation, an RFBA can be the detail that tips you over it, so it is worth checking rather than assuming it does not apply to you.
How Does Tax Falcon Help If You Have a Reportable Fringe Benefits Amount?
Tax Falcon's online return process pulls in your pre-filled income statement, including any reportable fringe benefits amount your employer has reported, so it is not something you have to track down yourself. A Standard Tax Return with Tax Falcon starts from $88, and every return goes through certified tax-agent review alongside Tax Falcon's Falcon-Vision AI checks before it is lodged, which matters for an item like an RFBA that affects several income tests at once rather than just your taxable income. The whole process, from signing up to lodging, is designed to take under ten minutes for a straightforward return, so a fringe benefit reported by your employer does not have to turn your tax time into extra admin.
Source: ato.gov.au, “How fringe benefits tax works”, and Reportable fringe benefits for employees.
Frequently Asked Questions
Do I have to pay fringe benefits tax myself?
No. Fringe benefits tax is paid by your employer, not by you as the employee. You may still see a reportable fringe benefits amount on your income statement if your benefits were worth more than $2,000 in the FBT year, but that amount is not itself taxed to you.
What is the current fringe benefits tax rate in Australia?
The FBT rate is 47% of the grossed-up taxable value of the benefits provided, for the FBT year running from 1 April to 31 March.
What is a reportable fringe benefits amount on my income statement?
It is the grossed-up value of the fringe benefits you received where the taxable value was more than $2,000 in an FBT year. It is shown on your income statement for information purposes and is not added to your taxable income.
Does a reportable fringe benefits amount affect my HECS or HELP repayments?
Yes. Your reportable fringe benefits amount is added to your taxable income, net investment losses and reportable super contributions to work out your repayment income for HECS, HELP and other study and training support loans.
Will my reportable fringe benefits amount already be included when I lodge?
In most cases yes, because employers report it to the ATO and it pre-fills into myGov and into tax agent software such as Tax Falcon's, though it is still worth checking it against your own records before you lodge.
