Providing work vehicles or other perks to staff?

Learn about recent fringe benefits tax (FBT) changes and focus areas so you can meet your obligations this FBT tax time.

Providing perks to employees

If you provide work vehicles or other perks to employees – even if they’re provided occasionally – you may be providing a fringe benefit. This means you could have FBT obligations for the FBT year (1 April 2025 – 31 March 2026).

Many businesses provide fringe benefits without realising it. Fringe benefits are non-cash perks provided to employees (or their family members or associates), on top of their wage or salary.

The most common example is providing a work vehicle that’s used for personal purposes, which includes when it’s garaged at an employee’s home. If your employees use work vehicles privately, take the time to understand your obligations so you can lodge correctly and stay compliant.

Changes affecting plug-in hybrid electric vehicles (PHEVs)

If you provide PHEVs to employees for personal use, be aware of the following changes that may affect your obligations this FBT tax time.

Electric car exemption eligibility

Since 1 April 2025, PHEVs are no longer eligible for the electric car exemption, unless you meet the specific eligibility requirements. This means you may now have an FBT liability for the 2025–26 FBT year, if you’ve continued providing a PHEV for employees’ personal use.

Shortcut home-charging method

If your employees charge PHEVs at home, you can use the shortcut method, which makes it easier to calculate home-charging electricity costs. You can opt to use this method if you’re eligible, or you can continue to use the actual electricity costs.

Key FBT focus area

ATO is increasing its focus on employers who may be overlooking and misreporting FBT on private use of work vehicles when work vehicles are used for personal purposes.

Check the steps you need to take to report correctly and stay compliant. Getting it right now can help you avoid potential audits, penalties, and interest charges.

For more information on your FBT obligations, see Fringe benefits tax (FBT) or speak to our RA Advisory’s registered tax agent.

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Source: ATO