Fringe Benefits Tax 2025: What Employers Need to Know

Fringe Benefits Tax (FBT) is an important consideration for businesses that provide benefits to their employees. Unlike income tax, FBT runs on a separate tax year from 1 April to 31 March. With increasing labour shortages, many employers are offering more fringe benefits to attract and retain staff. However, the Australian Taxation Office (ATO) has announced a crackdown on FBT registrations and return lodgements due to the identified ‘FBT Revenue Gap’.

To ensure compliance and avoid potential penalties, it’s essential to review your business's FBT obligations each year.

Should You Be Registered for FBT?

If your business provides any of the following benefits to employees (including directors), you may need to register for FBT:

• Company cars

• Car parking

• Entertainment (food and drink)

• Employee discounts

• Loans

• Reimbursement of private expenses

  
  

There are 13 defined Fringe Benefit categories under FBT law, so it’s important to assess whether your business is impacted.

Should You Lodge an FBT Return If No Tax is Payable?

While there is no legal requirement to lodge an FBT return if no tax is payable, submitting a Nil return limits the ATO’s audit window to three years from the date of lodgement. Otherwise, the ATO can review an unlimited number of years, potentially identifying areas where FBT and penalties may be charged. Lodging a return provides an added layer of protection for your business.

Key Actions for Employers Before 31 March 2025

To ensure compliance, we recommend taking the following steps:

• Record odometer readings: Take and store photo evidence of odometer readings for all business vehicles on 31 March 2025.

• Review meal entertainment expenses: Track expenses for employee, associate, and client entertainment and maintain a register of each event.

• Assess other fringe benefits: Review any additional benefits provided from 1 April 2024 to 31 March 2025 and keep detailed records.

  
  

FBT Fact Sheets

For more information, refer to our detailed fact sheets on key FBT areas:

• Employee Business Vehicles

• Exempt Motor Vehicles & Safe Harbour Provisions

• Meal Entertainment

• Minor & Infrequent Benefits

  
  

Next Steps

We offer the following services for businesses requiring FBT registration and lodgement:

• Full FBT Registration and Lodgement: Our price estimate depends on the number of employees and applicable benefit categories (such as motor vehicles, meal entertainment, and expense benefits).

• Nil Lodgement: If no FBT is payable, we can prepare and lodge a Nil return for $200+GST.

  
  

Act Now

We strongly encourage businesses to consider lodging an FBT return for the 2025 year. To proceed, simply respond to this email or complete our short form at [insert link] to confirm your decision.

Ensuring compliance with FBT regulations can protect your business from unexpected penalties and audits. If you need assistance, we’re here to help!