Not all employer-provided benefits attract Fringe Benefits Tax (FBT). A number of exemptions reduce or eliminate FBT liability for commonly provided benefits — including portable work devices, electric vehicles, genuine business travel, and minor benefits under $300. Understanding these exemptions is critical for employers designing salary packaging arrangements and for employees assessing the true value of their benefits.
Electric Vehicle FBT Exemption
From 1 July 2022, eligible electric vehicles (EVs) provided to employees as a car fringe benefit are exempt from FBT. This is one of the most significant recent changes to FBT and has made EV salary packaging popular in Australia.
Eligibility Conditions
To qualify for the EV FBT exemption:
- The car must be a zero or low-emission vehicle — battery electric, hydrogen fuel cell, or plug-in hybrid (phased out — see below)
- The vehicle’s purchase price must be below the luxury car tax (LCT) threshold for fuel-efficient vehicles — $91,387 for FY2025–26
- The car must be a car as defined for FBT purposes (designed to carry fewer than 9 passengers, not a motorcycle)
- The car must be provided by the employer (owned or leased by the employer) — employee-owned vehicles are not covered
Plug-In Hybrids (PHEVs)
Plug-in hybrid electric vehicles (PHEVs) were initially included in the EV exemption but are no longer exempt from 1 April 2025 unless the arrangement was in place before 1 April 2025 and has not been modified. Pure battery electric vehicles and hydrogen vehicles remain exempt.
Reportable Fringe Benefit
Even though an FBT-exempt EV does not attract FBT, the value of the benefit must still be reported on the employee’s payment summary/income statement as a reportable fringe benefit amount if it exceeds $2,000. This does not create a tax liability for the employee, but the amount is included in tests for government benefits and supplements (e.g., Medicare levy surcharge, private health rebate income tiers, family payments).
Work-Related Item Exemptions
Employers can provide the following items FBT-free when they are primarily for work use:
| Item | Limit per employee per FBT year |
|---|---|
| Laptop or notebook computer | 1 |
| Tablet device | 1 |
| Mobile phone | 1 |
| Portable printer | 1 |
| Calculator | 1 |
| Protective clothing | No limit |
| Briefcase or tool of trade | 1 |
The item must be primarily for work purposes (more than 50% business use). If an employer provides two laptops (e.g., a Mac and a Windows machine), FBT will apply to the second item unless a separate exemption applies.
The Minor Benefits Exemption
A benefit with a GST-inclusive value of less than $300 may be exempt from FBT under the minor benefits exemption, provided:
- The benefit is infrequent and irregular (not part of a pattern of providing benefits)
- It would be unreasonable to apply FBT given the nature and circumstances of the benefit
Common minor benefits:
- Staff Christmas party food and drinks (where the cost per person is under $300 and the event is infrequent)
- A gift voucher for a birthday or work anniversary under $300
- A bottle of wine given as a thank-you
Important: The $300 threshold applies per benefit, per employee, per occasion — not per year. A $200 Christmas gift and a $180 birthday gift are each assessed separately, so both may be exempt even though the total is $380.
Other Notable Exemptions
Work-Related Travel
Travel directly related to performing work duties — including travel between two workplaces — is exempt. Commuting (home to work) is not exempt.
Portable Recreational Facilities (On-Site)
Gym equipment, tennis courts, or other recreational facilities available on the employer’s premises and available to all employees are generally exempt. Off-site gym memberships are not.
Remote Area Housing
Employer-provided housing in a remote area where it would be unreasonable for employees to live elsewhere may qualify for an exemption or reduction.
Fly-In Fly-Out (FIFO) Travel
Transport between an employee’s home city and a remote worksite is generally exempt, as it is work-related transport rather than a personal benefit.
Salary Packaging Benefits Commonly Provided FBT-Free
For employees working for public hospitals, non-profit organisations, and registered charities, additional FBT concessions apply:
| Organisation type | FBT-exempt salary packaging cap |
|---|---|
| Public hospitals and ambulance services | $17,000 grossed-up cap |
| Other non-profit organisations (PBI) | $30,000 grossed-up cap |
| Rebatable employers (some non-profits) | 47% FBT rebate on benefits up to the rebatable cap |
Meal entertainment and entertainment facility leasing benefits have a separate cap of $5,000 (grossed-up) for eligible employees.
Related Articles
- Fringe Benefits Tax (FBT) Explained
- Sole Trader Tax Australia
- Small Business Tax Concessions Australia
- GST and Business Tax hub
Frequently Asked Questions
Is a $300 staff Christmas party FBT-free? If the cost per employee is under $300 and the party is held infrequently (once per year), the minor benefits exemption typically applies. If you also give each employee a gift worth $250 on the same day, the gift is assessed separately and may also be exempt — but seek advice if you are unsure, as the “infrequent and irregular” test applies to the pattern of providing benefits, not just to a single occasion.
Can I provide an employee with both a laptop and a phone FBT-free? Yes. A laptop (one) and a mobile phone (one) are both on the work-related items exemption list and each qualifies separately. You cannot provide two laptops FBT-free.
Does the EV exemption apply if the employee buys the car and the employer reimburses them? No. The EV FBT exemption applies when the employer (or a third party) owns or leases the car and makes it available to the employee. Reimbursement of the employee’s own car costs does not qualify for the exemption.
This article provides general tax information. FBT rules — especially for EVs and salary packaging — change frequently. For advice tailored to your situation, speak with a registered tax agent. Find one through the Tax Practitioners Board register.