When is the FBT return due for the 2026 FBT year?

The Fringe Benefits Tax (FBT) year ends on 31 March 2026. If a business is required to lodge an FBT return, it is generally due by 21 May 2026. However, where a registered tax agent lodges the return electronically, the due date is typically extended to 25 June 2026.

Do work vehicles provided to employees trigger FBT?

Providing a work vehicle to employees for private use may create an FBT liability. Businesses that allow employees, their family members or associates to use vehicles privately may need to lodge an FBT return and pay FBT. Proper records such as valid logbooks are important to correctly determine the taxable value.

What are common FBT compliance mistakes for vehicle benefits?

Common compliance issues highlighted by the ATO include failing to lodge FBT returns, assuming dual cab utes are automatically exempt, incorrectly claiming vehicle exemptions, failing to apportion private and business use, and not keeping adequate records such as logbooks.

When will the Small Business Superannuation Clearing House close?

The Small Business Superannuation Clearing House (SBSCH) will permanently close on 1 July 2026 as part of the Payday Super reforms. Employers currently using SBSCH should transition to an alternative super payment method before the closure.

What should employers do before the SBSCH closes?

Employers should choose an alternative super payment service, transition to the new system as soon as possible, and download any historical super contribution records from the SBSCH before it closes on 1 July 2026.

When will Payday Super start in Australia?

Payday Super is expected to commence from 1 July 2026. Under the new system, employers will be required to pay superannuation contributions at the same time employees are paid.

When will the late payment offset for super guarantee end?

The late payment offset (LPO) will no longer be available after the quarter ending 31 March 2026. Employers can still claim the offset for late payments made up to 30 June 2026 when lodging a Super Guarantee Charge statement.

Who needs to lodge a Reportable Tax Position schedule in 2026?

Companies must lodge a Reportable Tax Position (RTP) schedule with their income tax return if they have total business income of $250 million or more, or $25 million or more and are part of an economic group with total business income of $250 million or more.

2026 FBT Year End Is Fast Approaching

Sunnie Doan
Mar 6
4 min read

Updated: Mar 9

With the Fringe Benefits Tax (FBT) year ending on 31 March 2026, now is the right time for businesses to review their obligations and make sure everything is compliant.

This guide covers key FBT focus areas, including:

FBT exemption for electric cars
Private use of work vehicles
Contractor vs employee classification
Easier FBT record keeping
Entertainment expense mistakes
Employee contributions through journal entries
Not lodging FBT returns
FBT housekeeping tips

FBT Exemption for Electric Cars

You do not pay FBT if you provide private use of an electric car that meets all the following conditions:

The car is a zero or low emissions vehicle.
The first time the car is both held and used is on or after 1 July 2022.
The car is used by a current employee or their associates (such as family members).
Luxury car tax (LCT) has never been payable on the importation or sale of the car.

Benefits provided under a salary packaging arrangement are included in the exemption.

The government will complete a review into this exemption by mid-2027 to consider electric car take-up. We will provide an update when this review begins.

If you are not eligible for the exemption, for example, the vehicle doesn't meet the conditions of a zero or low emissions vehicle, you may need to pay fringe benefits tax for the private use of the car.

Plug in hybrids no longer automatically exempt

From 1 April 2025, plug in hybrid electric vehicles generally no longer qualify unless:

The exemption applied before 1 April 2025, and
There is a financially binding commitment that continues after that date

If that arrangement changes or breaks after 1 April 2025, the exemption will usually stop.

Private Use of Work Vehicles: A Key Risk Area

The ATO is actively using data analytics to identify employers who incorrectly report vehicle related to FBT.

Common risk areas include:

Not lodging FBT returns despite providing vehicles
Assuming dual cab utes are automatically exempt
Missing logbooks or odometer records
Treating private travel, including garaging at home, as business use

Important: If a vehicle is parked at or near an employee’s home, it is generally considered available for private use, even if private use is not allowed.

Employers should ensure:

Correct vehicle classification
Proper logbooks and supporting records

The ATO has highlighted cases where poor record keeping led to significant penalties, including one case resulting in $938,000 in liabilities.

Does FBT Apply to Your Contractors?

FBT usually applies to employees and office holders, not genuine independent contractors. However, worker classification can be complex.

Business tip: Review contractor arrangements regularly. Even genuine contractors may still create obligations such as superannuation or payroll tax.

Entertainment Expenses: A Common Mistake

The ATO often sees businesses claiming deductions for entertainment but not accounting for FBT correctly.

General rules:

Entertainment such as restaurant meals is usually not deductible
GST credits cannot normally be claimed unless FBT applies

Example – client lunch with an employee present

An employee takes three clients to lunch, and the employer reimburses a restaurant bill of $1,196 ($299 per person). Under the actual value method, only the employee’s share is subject to FBT. On a per-head basis, the taxable value is $299, while the clients’ share is not subject to FBT. Because the employee’s share is less than $300, the minor benefits exemption may apply, but only if the ATO’s conditions are met.

If the employer instead uses the 50:50 split method for meal entertainment, the taxable value is $598. In that case, 50% of the meal entertainment expenditure is generally subject to FBT, while the other 50% is generally deductible and eligible for GST credits.

Employee Contributions via Journal Entries

Some businesses reduce FBT by recording employee contributions through accounting journal entries instead of cash payments.

This is acceptable only if:

The employee is required to contribute under their agreement
The employer owes money to the employee (for example a bonus or loan)
Both parties agree to offset the amounts
Journal entries are made before financial accounts are prepared

If documentation is unclear, the ATO may reject the arrangement and impose additional FBT liabilities.

Note: loan arrangements may create separate tax issues.

Not Lodging FBT Returns

The ATO remains concerned about employers failing to lodge FBT returns when required.

You may have FBT obligations if you provide:

Company vehicles or car parking
Reimbursed private expenses
Entertainment such as food and drink
Employee discounts

Some items are commonly exempt, including portable electronic devices, protective clothing, and tools of trade.

Businesses providing only exempt benefits or infrequent benefits under $300 may not need to lodge, but this should be reviewed carefully.

FBT Housekeeping

Keeping accurate records to meet the 5-year record-keeping requirements can be difficult, especially when staff need to provide information at specific times.

If your business provides vehicles, remember to record odometer readings on: