Company vehicles and FBT: What you should know this financial year

If your business provides company vehicles or allows team members to use business cars for personal reasons, understanding company vehicle FBT is key to staying compliant while avoiding surprise costs.

What is Fringe Benefits Tax?

Fringe Benefits Tax

is a tax paid by employers when they provide benefits to employees that aren’t part of their salary or wages, including access to a vehicle for private use.

FBT is separate from income tax and is calculated based on the taxable value of the benefit. Even if the benefit is offered to an employee’s family member or associate, FBT can still apply. That’s why it’s crucial to review your vehicle arrangements at the beginning of the financial year.

When does FBT apply to company vehicles?

Generally, if your business owns or leases a vehicle and it’s available for private use, even occasionally, FBT is likely to apply. This includes:

• Travel between home and work
• Using the vehicle on weekends
• Any non-business-related travel

Understanding how these uses impact your business vehicle tax obligations can help you set up appropriate usage policies and avoid unnecessary tax liabilities.

Reviewing FBT exemptions and policy changes

Not all vehicles attract FBT. Some commercial vehicles, like utes and vans, may be eligible for FBT exemptions, but only if private use is minor, infrequent and irregular.

As part of your new financial year planning, it’s a good idea to:

• reassess which vehicles may qualify for exemptions
• review employee declarations and logbooks
• check for updates to ATO FBT rules or thresholds.

These steps will ensure you're aligned with current regulations and not overlooking any new compliance requirements.

Recordkeeping matters

Accurate recordkeeping is essential for FBT reporting, especially if you use the logbook method. You’ll need:

• Detailed odometer readings
• 12-week logbooks to determine business vs private use
• Expense tracking for fuel, maintenance and running costs

Digital tools like the Shell Card Portal can simplify this by automating reporting, centralising fleet expense tracking and helping you maintain a clear audit trail.

Take action this financial year

Understanding your company vehicle FBT obligations early in the financial year puts your business in a stronger position to manage compliance and costs.

Now is the time to:

• Review your vehicle usage policies
• Confirm any potential FBT exemptions
• Ensure your recordkeeping aligns with ATO FBT rules
• Streamline tax admin with better tracking and automation tools

Proactive planning now means fewer surprises later and a smoother path to growth.

^Disclaimer

^{Viva Energy Australia Pty Ltd (“Viva Energy”) has compiled the above article for your general information and to use as a general reference. Whilst all reasonable care has been taken by Viva Energy in compiling this article, Viva Energy does not warrant or represent that the information in the article is free from errors or omissions or is suitable for your intended use.}