The fringe benefits tax year runs from 1 April to 31 March — and if your business provided any non-cash benefits to employees or their family members during that period, an FBT return may be due. The lodgement deadline is 21 May, so now is the time to check whether this applies to you.

What is fringe benefits tax?

Fringe benefits tax, or FBT, is a tax paid by employers on certain benefits they provide to employees, associates of employees, or directors — in addition to, or instead of, salary and wages. The current FBT rate is 47%, which is aligned with the top marginal income tax rate. It is separate from income tax and is calculated on the grossed-up taxable value of the benefits provided.

It is worth noting that FBT is an employer obligation, not an employee one. The employee receives the benefit, but it is the employer who is responsible for calculating, reporting, and paying the tax.

Which benefits commonly trigger FBT?

The most common fringe benefits that create an FBT liability include company cars used for private purposes, car parking provided at or near a workplace, entertainment such as meals, functions, and tickets to events, low or no-interest loans to employees, and living away from home allowances. Housing provided to employees is also a common trigger, particularly in remote locations or when relocating staff.

Not all benefits are subject to FBT. Some are exempt — for example, certain work-related items such as laptops, mobile phones, and tools of trade used primarily for work. Minor benefits with a taxable value under $300 may also be exempt, provided they are provided on an irregular and infrequent basis. Understanding which benefits fall in or out of the FBT net is essential before you conclude that no return is required.

Reportable fringe benefits on payment summaries

If an employee receives fringe benefits with a total grossed-up taxable value exceeding $2,000 in the FBT year, the employer must record a reportable fringe benefits amount on the employee’s income statement. This amount does not increase the employee’s income tax liability directly, but it is taken into account for certain income tests — affecting things like Medicare Levy Surcharge eligibility, HECS-HELP repayments, and government benefit calculations. Employees should be aware of this if it applies to them.

What you need to do before 21 May

If your business has provided fringe benefits during the 2025–26 FBT year, you need to calculate the taxable value of those benefits, prepare and lodge your FBT return, and pay any FBT owing by 21 May 2026. If you are lodging through a registered tax agent, an extended due date of 25 June 2026 may apply. Even if you do not owe any FBT — for example, because all benefits were exempt — it is worth reviewing your position to ensure you are not inadvertently missing an obligation.

If your business has not provided any fringe benefits and you have previously lodged an FBT return, you may need to advise the ATO that you are no longer required to lodge. Your accountant can help you confirm this and make sure your obligations are fully met before the deadline.

FBT is one of the more complex areas of tax compliance — the rules around what is and is not taxable can be tricky, and the cost of getting it wrong can be significant. If you are not sure whether you need to lodge a return, get in touch with us before the 21 May deadline.

With the end of the financial year just weeks away, most business owners are heads-down managing day-to-day operations. But this is precisely the time to pause and take stock of how your business is actually performing — not just how it feels. A structured review of your key financial metrics now gives you the chance to fix problems, capture opportunities, and walk into the new financial year with a clear picture.

Gross profit margin

Start with your gross profit margin — the percentage of revenue left after you subtract the direct cost of delivering your product or service. If your margin is tracking below budget or below where it was at this point last year, something has changed. Either your prices haven’t kept up with rising input costs, your cost of goods has crept up without you noticing, or your sales mix has shifted toward lower-margin work. Any of these is worth investigating before they become a bigger problem in the new financial year.

Debtor days and cash flow

How long are your customers actually taking to pay you? Debtor days — the average number of days between issuing an invoice and receiving payment — is one of the clearest signals of cash flow health. If your debtor days have stretched out compared to the same period last year, you may have a growing pile of unpaid invoices quietly eroding your working capital. Now is a good time to identify your slow payers, review your payment terms, and consider whether your invoicing and follow-up process needs tightening. On the other side, check your creditor days too — are you paying your suppliers on time, or are there outstanding bills building up?

Revenue vs forecast and cash in the bank

Pull your year-to-date revenue and compare it directly against what you planned at the start of the year. If you’re tracking behind, ask why — is it a market issue, a pricing issue, or a specific client or product line underperforming? If you’re tracking ahead, consider whether your cost base has scaled appropriately, or whether there’s an opportunity to invest before 30 June. Then look at your bank balance right now compared to this time last year. Cash is the ultimate reality check — it doesn’t lie the way profit figures sometimes can.

End-of-year tax planning and write-offs

Before 30 June, this is also the window to consider whether there are any write-offs you should be taking — bad debts you’ve been holding onto, obsolete stock, or assets that are no longer in use. It’s also worth reviewing whether there are any asset purchases or prepayments that make sense to bring forward into this financial year. These decisions are worth running past your accountant rather than making on the fly — the tax implications vary depending on your business structure and current-year income.

The difference between planning and reacting

Businesses that review their numbers regularly — not just at tax time — consistently make better decisions. The metrics above aren’t just housekeeping; they’re the early warning system that tells you whether your business is on track or quietly drifting off course. Taking an hour now to work through these figures is one of the most valuable things you can do before the new financial year begins.