Who can claim
This deduction is available to individuals and companies.
- The benefit is provided by an employer to an employee, associate or relevant former or future employee and the FBT rules are applied.
- The expense and any FBT paid satisfy the relevant income-tax deduction rules.
What you cannot claim
- Salary and wages, employer super contributions and contractor benefits are not fringe benefits merely because they are employment-related.
- Client entertainment and exempt or concessional benefits have separate deduction and FBT outcomes.
- Enter each underlying benefit cost and the FBT paid once; do not duplicate either amount under another business-expense rule.
How the amount is worked out
For the 1 April to 31 March FBT year, calculate each benefit's taxable value. Split GST-creditable type 1 values from other type 2 values, multiply them by the applicable gross-up rates of 2.0802 and 1.8868, add the grossed-up amounts, then multiply by the 47% FBT rate. FBT paid is deductible; the underlying benefit cost follows its own GST and income-tax rules and must be entered only once.
Records the ATO expects
- Benefit register for the 1 April to 31 March FBT year
- Employee declarations
- Benefit-specific taxable-value worksheet
- Type 1 and type 2 aggregate calculations
- FBT return and payment evidence
Before you rely on this rule
FBT is a separate tax system with benefit-specific exemptions, concessions and reporting obligations. Review the ATO FBT guide before adding an amount.
Where this rule comes from
Primary source: ATO calculating fringe benefits tax (ATO FBT rate and gross-up calculation). Reviewed 30 July 2026. Covers the 2025-26 and 2026-27 income years.
Supporting sources:
- ATO fringe benefits tax guide (Updated 16 July 2024)