On 31 March 2023, the Fringe Benefits Tax (FBT) year ends. With the ever-increasing budget deficits as a result of COVID-19, the ATO will be reviewing whether all employers who should be paying FBT are paying it, and that they are paying the right amount. The ATO has recently announced that the ‘FBT gap’ is over $1 billion and will be deploying resources for FBT compliance to close this gap.

To help you meet your FBT obligations, we’ve put together a list of essentials every employer needs to know about FBT and review every year, such as:

  • Should I be registered for FBT?
  • Should I lodge a FBT Return even if no FBT is payable?
  • Key things you MUST do on 31 March 2023

These questions are all answered for you below.


Generally, if you have employees (including Directors) and you provide them with cars, car parking, entertainment (food and drink), employee discounts, loans, or reimburse private expenses, then you are likely to be providing a fringe benefit and we will need to register your business for FBT. There are 13 defined Fringe Benefit categories in the FBT law, so if you are unsure please contact us.

It’s important you start gathering all the details of these provided benefits as soon as possible, so we can calculate any potential FBT liability and lodge your FBT return on time – due 27 June 2023 with payment to be made by 27 June 2023.


Where no FBT is payable there is legally no need to lodge an FBT return, but should you lodge one anyway?

Our strong recommendation to you is yes, you should lodge an FBT Return if you provide benefits to employees, even if no FBT is payable.

This restricts the ATO’s audit window to only 3 years from the date of lodgement. Otherwise, the ATO is entitled to go back an unlimited number of years and audit your business and possibly find areas where they will charge you FBT and penalties.


Whilst we strongly recommend that you register for FBT and if applicable lodge a Nil FBT Return, if you decide not to there is still key information that you need to record as at 31 March 2023.  We will then rely on this when we complete your 2023 annual Financial Statements. Here’s a summary of what you need to do:

  • On Friday 31 March 2023, when the employees have finished their travel for the day request your team each take a photo of their vehicle odometer readings using their phones and email it the photo to you, or to a nominated person in your business to collate them all for you. Having these vehicle odometer readings for all business vehicles is vital to us being able if your FBT can be reduced by using the ‘operating cost’ method instead of the ‘statutory formula’ method.
  • Carefully manage the private use of business cars, including the travel between home and work. The ATO is conducting a data matching program aimed at motor vehicles to capture benefits that aren’t currently being reported through FBT. If significant variances are identified a full ATO audit may follow.
  • Review all meal entertainment expenses provided to employees, associates and clients and prepare a register that outlines the following for every event:
    • The total cost (GST inclusive)
    • How many employees were present and their names
    • How many employees’ associates were present and their names
    • How many clients were present (names not needed)
    • The nature of the event (dinner, lunch, coffee, drinks, etc.)
  • Consider if you have provided any other fringe benefits.