Are electric vehicles FBT-exempt?

Yes, from 1 July 2022, electric vehicles (EVs), plug-in hybrids, and hydrogen fuel cell vehicles provided as fringe benefits are exempt from FBT if: the car was first held/used on or after 1 July 2022, it was not a second-hand car when first used, and its value is below the luxury car tax threshold for fuel-efficient vehicles ($89,332 for 2024-25).

What items are FBT-exempt?

Commonly FBT-exempt items include: portable electronic devices primarily for work (one per category), tools of trade, protective clothing, briefcases, employer contributions to complying super funds, car parking at small businesses (< 25 cars), and minor benefits under $300 (infrequent and irregular).

How does salary packaging work with FBT?

Salary packaging converts part of your pre-tax salary into a non-cash benefit. The employer pays for items from your pre-tax income, reducing your taxable income. However, FBT may apply to the benefit. For private sector employees, the FBT can negate the tax saving. For hospital/charity employees, FBT exemptions make it very beneficial.

Fringe Benefits Tax Calculator

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Calculate the Fringe Benefits Tax on salary packaging, company cars, and other employee benefits. See the grossed-up value and FBT payable.

Free to useNo data storedAI insightsUpdated: February 2026

Fringe Benefits Tax (FBT) is an employer tax on non-cash benefits provided to employees — things like company cars, salary packaging, meals, and entertainment. While FBT is paid by the employer, it often impacts how salary packaging arrangements are structured and what's included in your reportable fringe benefits. The FBT rate is 47% (matching the top marginal rate + Medicare), applied to the 'grossed-up' value — making it one of the highest effective tax rates. Understanding FBT is crucial for anyone using salary packaging.

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Real-World Examples

Company Car FBT

An employer provides a car worth $50,000 to an employee. Using the statutory formula (20% of base value), taxable value is $10,000.

Grossed-up value (Type 1): $10,000 × 2.0802 = $20,802. FBT payable by employer: $20,802 × 47% = $9,777. This is the employer's cost ON TOP of the car itself. Employee contribution can reduce the $10,000 taxable value.

Salary Packaging at a Hospital

A nurse salary packages $15,900 at a public hospital (FBT-exempt employer).

FBT payable: $0 (exempt up to $15,900 for PBI employers). The nurse receives $15,900 from pre-tax salary — saving approximately $4,770-$7,155 in tax depending on marginal rate. This is why hospital/charity salary packaging is so powerful.

Frequently Asked Questions

Glossary

Fringe Benefits Tax (FBT)

A tax paid by employers on non-cash benefits provided to employees. The rate is 47%, applied to the grossed-up value of the benefit.

Gross-Up Rate

A multiplier applied to the taxable value to account for the GST and income tax that would have been payable. Type 1 (GST): 2.0802. Type 2 (no GST): 1.8868.

Reportable Fringe Benefits

Fringe benefits over $2,000 that must be reported on your payment summary. Affects income-tested government benefits and obligations but is NOT double-taxed.

Salary Packaging

An arrangement where part of your salary is paid as non-cash benefits instead of cash. Can provide tax savings, especially for FBT-exempt items or exempt employers.

Related Tools

Income Tax Calculator

See how salary packaging affects your income tax.

Tax Deduction Finder

Find work-related deductions as an alternative to salary packaging.

Tax Refund Estimator

Estimate your refund including salary packaging impact.

How to Use

1Select the type of fringe benefit being provided.
2Enter the taxable value of the benefit for the FBT year.
3Choose whether the benefit includes GST (affects the gross-up rate).
4Enter any employee contributions that reduce the FBT amount.
5Select your employer type (charities/hospitals have exemptions).
6See the grossed-up value, FBT payable, and effective cost.

Key Information

The FBT rate is 47% for all FBT years from 2017 onwards.
FBT year runs 1 April to 31 March — NOT aligned with the financial year.
Type 1 gross-up rate (GST inclusive): 2.0802. Type 2 (no GST): 1.8868.
Charity and hospital employees can salary package up to $15,900 (general) + $2,650 (meals/entertainment) FBT-free.

Pro Tips

Employee contributions from after-tax income reduce the FBT taxable value — or can eliminate FBT entirely for car benefits.
Electric vehicles (EVs) are FBT-exempt if the car value is below the luxury car tax threshold — a huge benefit for salary packaging.
If you work at a hospital or charity, salary packaging is extremely attractive due to FBT exemptions.
Consider packaging items that are FBT-exempt: laptops, phones, tools of trade, and employee contributions to super.

Avoid These Mistakes

Assuming FBT is 'free' because the employer pays it — FBT is factored into your total remuneration package cost.
Not realising that reportable fringe benefits can affect income-tested government benefits (Family Tax Benefit, HECS threshold, etc.).
Forgetting the FBT-exempt items: work laptops, phones, protective clothing, and some portable electronic devices.
Mixing up the FBT year (April-March) with the financial year (July-June).

Disclaimer: This calculator provides estimates only and should not be relied upon for financial decisions. Interest rates, fees, and policies change frequently. Always verify information with lenders directly. This is general information, not personal financial advice. Consider seeking advice from a licensed mortgage broker or financial advisor.

Last updated: February 2026