Fringe benefits tax (FBT)

Fringe benefits tax is the tax an employer pays when a work car is available for an employee's private use, calculated on the car's value or its running costs and paid by the employer, not the driver.

The FBT year runs 1 April to 31 March. For cars there are two ways to work out the taxable value: the statutory formula method, based on the car's value and the days it was available privately, and the operating cost method, based on actual running costs and a logbook. Employers can use whichever gives the lower value, and eligible electric cars can be exempt entirely.

The practical problem is gathering data about days available, garaging, odometer readings and trip purposes. Fleet booking and telematics data can provide it. Start with the FBT guide.

Last updated 10 July 2026. General information, not tax or legal advice.