Providing work vehicles or other perks to staff?
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
The Tax Office is increasing the 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 an Omnis registered tax agent on 08 9380 3555.
Why your dual cab utes may attract FBT
There’s a common myth that dual cab utes are automatically exempt from fringe benefits tax (FBT). However, that’s not the case.
If your business provides dual cab utes to your employees to complete their duties and the vehicle is available for personal use, then the benefit may be subject to FBT.
Understand when your employee’s personal use of work dual cab utes may attract FBT. Knowing how your employees use their dual cab utes outside of work will help you determine when FBT applies so you can meet your FBT obligations.
When FBT doesn’t apply
To establish if you or your employees’ use of a dual cab ute is exempt, there are two conditions that must be met. The dual cab must be:
- an eligible vehicle, which means it’s designed to carry:
- a load of one tonne or more, or
- more than 8 passengers (including the driver), or
- a load under one tonne and not primarily designed for carrying passengers
- only used for limited private use (i.e. minor, infrequent and irregular), such as the occasional trip to the tip or helping a mate move house.
So, if you or your employee use the dual cab ute as the family taxi or for weekend personal trips, it’s not exempt and FBT applies. Check your FBT obligations to ensure compliance with FBT requirements.
When FBT applies
If your employee’s personal use doesn’t meet both exemption conditions, your business will be liable for FBT. Even if the benefit is exempt from FBT because of limited private use, you need to keep records to support this.
If FBT applies, you need to:
- keep accurate records
- determine the taxable value of the fringe benefit
- calculate the amount of FBT to pay
- lodge an FBT return and pay the FBT owning
- report the employee’s reportable fringe benefit through Single Touch Payroll or on your employee’s payment summary (if the aggregated taxable value of their reportable fringe benefits is more than $2,000 in the FBT year).
Find more information at Exempt use of eligible vehicles.
Misreporting FBT on personal use of work vehicles
The ATO’s focus is on employers who don’t meet their FBT obligations when providing work vehicles for private use.
Providing private use of a work vehicle is one of the most common fringe benefits offered by employers.
If you make a vehicle available to your employees (or their family members or associates) for private use, it may be subject to fringe benefits tax (FBT). This means you may need to lodge an FBT return and pay FBT.
Failing to report, or incorrectly reporting, fringe benefits can create compliance issues for employees. Doing it right ensures a level playing field and helps your employees meet their tax obligations.
Employers who overlook their FBT obligations may:
- fail to lodge an FBT return when required
- assume private use of a dual cab ute is automatically exempt
- incorrectly claim vehicle exemptions
- avoid apportioning private and business use
- don’t keep adequate records, such as valid logbooks.
These practices can lead to audits, penalties and interest charges.
If you provide a work vehicle that employees can use for private purposes, check if there’s a fringe benefit and ensure it’s reported correctly.
The ATO uses sophisticated data and analytics to identify businesses that aren’t meeting their obligations. Their compliance teams are actively contacting employers who fail to comply or deliberately avoid FBT.
Don’t risk penalties or reputational damage; stay on top of your FBT obligations and keep accurate records.
For tailored advice about your business tax needs, speak to your registered tax practitioner at Omnis on 08 9380 3555.
Australian Tax Office Sources
- Providing work vehicles or other perks to staff? (10 March 2026)
- Why your dual cab utes may attract FBT (17 November 2025)
- Misreporting FBT on personal use of work vehicles (6 February 2026)
