How to Use the FBT Calculator Australia
- Choose "Car" for a vehicle benefit using the statutory formula, or "General benefit" for any other taxable value.
- Enter the car's base value, days available, and any employee contribution — or the benefit's taxable value directly.
- Choose Type 1 or Type 2 gross-up, then select Calculate.
How Fringe Benefits Tax Is Calculated
Fringe benefits tax (FBT) is paid by employers who provide employees with non-cash benefits — a car for private use, a gym membership, or paying a private expense on their behalf. The tax applies to a "grossed-up" value of the benefit, not its raw cost, to roughly equalise it with paying the equivalent amount as taxable salary.
FBT Rate and Gross-Up Rates (Year Ending 31 March 2027)
The FBT rate is 47%. Before that rate is applied, the taxable value is "grossed up" using one of two rates: 2.0802 for Type 1 benefits (where the employer can claim a GST credit) or 1.8868 for Type 2 (where they can't). Source: ATO — fringe benefits tax rates and thresholds.
Car Fringe Benefits
The statutory formula method charges a flat 20% of the car's base value, regardless of how far it's driven — this replaced the old distance-based tiers in 2014. The taxable value is reduced proportionally for any days the car wasn't available for private use, and further reduced by any after-tax contribution the employee makes towards running costs.
Worked Example
A $45,000 car, available all year with no employee contribution, has a taxable value of $9,000 under the statutory formula. Grossed up at the Type 1 rate, that becomes $18,722, giving FBT payable of $8,799.
Employee Contributions Reduce FBT
An after-tax contribution the employee makes towards the car's running costs directly reduces the taxable value under the statutory formula, dollar for dollar, before grossing up. This is a common way novated lease arrangements are structured — the employee contributes a set amount each pay, sized to reduce the taxable value enough to minimise or eliminate the FBT the employer would otherwise pay.
The Electric Vehicle FBT Exemption
Eligible electric vehicles below the fuel-efficient luxury car tax threshold (around $91,000, indexed annually) are currently fully exempt from FBT for the FBT year this calculator covers, ending 31 March 2027. The government has announced this exemption will narrow from 1 April 2027: vehicles above $75,000 will move to a 25% FBT discount rather than a full exemption, with the discount itself phasing out for all eligible EVs from 2029. If your benefit is an eligible EV under the current threshold, no FBT applies regardless of what this calculator shows for a comparable petrol or diesel vehicle. Source: ATO — electric cars exemption.
Operating Cost Method: An Alternative
Instead of the statutory formula, employers can elect the operating cost method for a car benefit, which applies the business-use percentage (based on a logbook) to the car's actual running costs plus deemed depreciation and interest. It often gives a lower taxable value than the statutory formula for cars with high business use, but requires a valid logbook and more record-keeping. This calculator only covers the statutory formula method.
See how a novated lease affects an employee's own pay with our Take Home Pay Calculator Australia, or check every current rate and threshold on our Australian Tax Rates and Brackets.