Understanding Your FBT Reporting

Fringe Benefits Tax has a reputation for being complicated. For businesses running novated leasing through Leaselab, it doesn't need to be. We do all the work behind the scenes and stay alongside you throughout, proactively sharing the information and support you need to maintain a $0 liability. Here's a quick, plain English guide to what's actually happening behind your reporting.

FBT is a tax employers pay, not employees, on non-cash benefits provided to staff, including a car made available for private use. The FBT year runs from 1 April to 31 March, and the current FBT rate is 47% of the benefit's grossed-up taxable value. On paper, that sounds like a real cost to your business. In practice, it almost never is.

Most novated leases use the Employee Contribution Method, or ECM. Your employee makes part of their lease payment from post-tax salary rather than pre-tax, and that post-tax contribution offsets the taxable value of the car benefit, generally down to nil. Leaselab structures and manages this split for every lease, so the FBT liability lands where it should: at zero, not on your business.

Your Leaselab reporting shows the figures behind that $0 outcome for each employee's lease, the taxable value calculated, and the contribution applied against it. It's designed to give you, or your accountant, the documentation to demonstrate the $0 liability position at FBT return time, and to slot straight into your existing BAS and payroll processes.

If any of your employees lease an eligible electric vehicle, there's an extra layer worth knowing about. Fully electric vehicles that are below the luxury car tax (LCT) threshold are currently exempt from FBT entirely. From 1 April 2027, the FBT treatment will change. Eligible EVs costing $75,000 or less will continue to receive the full FBT exemption. Eligible EVs costing more than $75,000 but remaining below the LCT threshold will still receive an FBT concession, but this will reduce to a 25% discount on the FBT payable rather than a full exemption. From 1 April 2029, the 25% FBT discount will apply to all eligible EVs below the LCT threshold, regardless of whether the vehicle costs more or less than $75,000. Plug-in hybrids lost their eligibility for the EV FBT exemption from 1 April 2025, unless the arrangement was already covered by the transitional rules. These settings are subject to government policy and legislation, so always confirm the current position for a specific vehicle and lease arrangement with your Account Manager before relying on it.

Leaselab manages the mechanics, but your FBT return remains your business's legal obligation. We'd always recommend running your reporting past your accountant or registered tax agent at lodgement time. Think of us as the team making sure the numbers are right, not a replacement for your own tax advice.

FBT is exactly the kind of topic that lands better in a conversation than an inbox. Ask your Account Manager for a walkthrough of your reporting, or request our printed FBT explainer for your finance team, it breaks all of this down on one page.