FBT year ends 31 March 2026: what you can still change

The FBT year ends on 31 March 2026, which is next Tuesday. Most of your fringe benefits tax position for the year was fixed months ago. Three things were not: the employee contributions that reach you before the year closes, the odometer readings someone takes on the day, and where each car is parked on 31 March. The rate is 47%, and a dollar of taxable value costs you close to a dollar of tax. Here is what is still moveable, and what is not.

The rates for the year ending 31 March 2026

The FBT year runs from 1 April to 31 March, so the 2026 year is 365 days. The rate is 47%. The Type 1 gross-up rate, which applies where you can claim GST credits on the benefit, is 2.0802. The Type 2 rate is 1.8868. The ATO publishes all three on its fringe benefits tax rates and thresholds page, with the rest of the numbers this article uses:

• The car parking threshold for the year ending 31 March 2026 is $11.03 a day.
• Reportable fringe benefits start once an employee's reportable benefits exceed $2,000 of taxable value. The minimum grossed-up amount reported is $3,773.
• The statutory formula percentage is 20%. Under the operating cost method, deemed depreciation is 25% diminishing value and the statutory interest rate is 8.62%.
• If your FBT for this year is $3,000 or more, you pay quarterly instalments next year.

Do the multiplication once. A dollar of Type 1 taxable value costs 97.8 cents of FBT. A dollar of Type 2 taxable value costs 88.7 cents. FBT is very nearly a dollar-for-dollar tax, so small moves before 31 March are worth more than they look.

What is still moveable before 31 March

Take odometer readings on 31 March. Not the following week, and not from memory. Without opening and closing odometer records you cannot use the operating cost method, and the statutory formula's flat 20% applies no matter how much of the driving was for work.

Get employee contributions paid, not accrued. A contribution reduces taxable value dollar for dollar; what that is worth is below.

Look at where the cars are. A car garaged at an employee's home is available for private use and counts, even where a policy prohibits private use and the employee never uses it that way. Chapter 7 of the ATO's guide for employers on car fringe benefits is blunt about it. Days only come off the count where the car is genuinely unavailable, such as parked at your premises with the keys under your control, or in a workshop for extensive repairs. Routine servicing does not count.

Two things will not work. Starting a logbook now does nothing for 2026: a logbook runs for a continuous 12 weeks, and where that period extends past 31 March, the following year becomes the logbook year. Start one today and you have improved 2027. Buying a plug-in hybrid this week does not buy an exemption either.

What an employee contribution is actually worth

An employee contribution is a payment your employee makes from after-tax income towards the benefit. It reduces the taxable value dollar for dollar.

Take an example. A Robina trade business provides an employee with a car that cost $52,000. It is garaged at the employee's home all year, and the business claims GST credits, so the Type 1 rate applies.

• Statutory formula: $52,000 × 20% × 365/365 = $10,400 taxable value.
• FBT: $10,400 × 2.0802 × 47% = $10,168.

The employee pays the business $4,000 on 27 March 2026.

• Taxable value: $10,400 − $4,000 = $6,400.
• FBT: $6,400 × 2.0802 × 47% = $6,257.

That $4,000 removed $3,911 of FBT. Two amounts come back the other way, and both are in the ATO's guide. The contribution is consideration for a taxable supply, so you remit one-eleventh of it, $363.64, as GST, and the $4,000 is assessable income to the business.

A journal entry can be a contribution, but only where the employee has an obligation to pay you, you have an obligation to pay the employee, and you both agree to set one against the other. A year-end entry with nothing behind it is not a contribution.

Statutory formula or operating cost: the choice you have not made yet

You do not tell the ATO which method you used. Your records show it, and the choice is not settled when the year ends.

Carry the same car forward. Say its operating costs came to $14,000 once you add fuel, insurance, registration and servicing to deemed depreciation and deemed interest, and a valid logbook shows 60% business use.

• Operating cost: $14,000 × 40% private use = $5,600 taxable value.
• Less the $4,000 contribution: $1,600.
• FBT: $1,600 × 2.0802 × 47% = $1,564.

Same car, same year, same contribution. The statutory formula gives $6,257 of FBT and the operating cost method gives $1,564. The gap is $4,693 on one vehicle, and it turns on whether anyone kept a logbook and read the odometer.

There is a floor built into the choice. If the operating cost method produces a higher taxable value than the statutory formula, the election is treated as never having been made and the statutory result stands. Running the numbers cannot make you worse off, so run them on every car before the return is prepared. That work sits in taxation and compliance, and it depends entirely on the vehicle records your bookkeeping has carried all year.

Electric cars: where the exemption stands for 2026

There is no FBT on the private use of an eligible electric car. The ATO's guidance on the electric cars exemption sets conditions that all have to be met:

• The car is a battery electric vehicle or a hydrogen fuel cell electric vehicle.
• It is a car designed to carry a load under one tonne and fewer than nine passengers including the driver. Motorcycles and scooters are not cars for FBT.
• The first time it was both held and used was on or after 1 July 2022.
• It is used by a current employee or an associate.
• Luxury car tax has never been payable on it, at first retail sale or on any sale since. The ATO's luxury car tax threshold for fuel-efficient vehicles is $91,387 for 2025-26.

Registration, insurance, repairs, maintenance and the electricity to charge the car are exempt as well. A home charging station is not.

Plug-in hybrids stopped being zero or low emissions vehicles on 1 April 2025. They stay exempt only where the vehicle was used or available for use before that date and a financially binding commitment to keep providing it was already in place. What matters for a 2026 return is what ends one of those commitments. The ATO's page on FBT on plug-in hybrid electric vehicles lists them: a change of employer, even within the same group; a break in the novation, including an unpaid leave period where the novation stops; and a change to lease payments or the residual value. An optional extension is not a binding commitment either, so the exemption ends when the original fixed term does, even if the option is taken up. The exemption stops from the date of the change, not from the end of the year. A redundancy in September 2025 ends it in September 2025, and the rest of that year is a taxable car benefit. Restructuring a vehicle lease mid-term is exactly the kind of change that creates a new commitment, so the FBT position and the asset and vehicle finance question belong together.

Car parking: the $11.03 threshold and the small business exemption

A car parking fringe benefit arises on a day when all four of these hold. The employee parks a car somewhere you own, lease or control. That place is at or near their primary place of employment and within one kilometre, by the shortest practicable route, of a commercial parking station charging an all-day fee above the threshold on both the first day of the FBT year and the day the benefit is provided. The car is parked more than four hours between 7am and 7pm. The employee drives between home and work at least once.

For the year ending 31 March 2026 the threshold is $11.03 a day. Around Robina and Southport, whether a nearby station charged more than that on 1 April 2025 is a live question rather than a formality.

Check the exemption before you calculate anything. The ATO's page on car parking and FBT sets out the small business exemption, which applies where all three of these hold:

• The parking is not provided in a commercial car park.
• For the last income year before the FBT year, your gross total income was less than $10 million, or your aggregated turnover was less than $50 million.
• You are not a government body, a listed public company, or a subsidiary of a listed public company.

Occasional parking may also fall within the minor benefits exemption where it is worth less than $300 and it would be unreasonable to treat it as a fringe benefit.

Reportable amounts, and the 2026 lodgment dates

Work out reportable fringe benefits now rather than in July. Where an employee's reportable benefits exceed $2,000 of taxable value, you report the grossed-up figure through Single Touch Payroll for the income year ending 30 June 2026. The gross-up is always the Type 2 rate of 1.8868, even where you paid FBT at the Type 1 rate, so an employee just over the threshold has $3,773 reported.

That amount is not taxed, but it is picked up in the income tests for things like HELP repayments, the Medicare levy surcharge and family assistance. The time to tell an employee about it is now, not when their income statement lands. An exempt electric car is still reportable. Car parking you provide yourself is not.

Your 2026 FBT return and the payment are both due on 21 May 2026. The ATO's guidance on lodging your FBT return and paying puts the tax agent date at 25 June 2026 where the agent lodges electronically, with the condition most people miss: you must already be on that agent's FBT client list by 21 May. Being added in June does not buy the extension. If you are registered for FBT but have no liability for the year, lodge a notice of non-lodgment rather than nothing.