Providing work vehicles or other perks to staff?

Providing perks to employees

If you provide work vehicles or other perks to employees – even if they're provided occasionally – you may be providing a fringe benefit. This means you could have FBT obligations for the FBT year.

Many businesses provide fringe benefits without realising it. Fringe benefits are non-cash perks provided to employees (or their family members or associates), on top of their wage or salary.

The most common example is providing a work vehicle that's used for personal purposes, which includes when it's garaged at an employee's home. If your employees use work vehicles privately, take the time to understand your obligations so you can lodge correctly and stay compliant.

Changes affecting plug-in hybrid electric vehicles (PHEVs)

If you provide PHEVs to employees for personal use, be aware of the following changes that may affect your obligations this FBT tax time.

Electric car exemption eligibility

Since 1 April 2025, PHEVs are no longer eligible for the electric car exemption, unless you meet the specific eligibility requirements. This means you may now have an FBT liability for the FBT year, if you've continued providing a PHEV for employees' personal use.

Shortcut home-charging method

If your employees charge PHEVs at home, you can use the shortcut method which makes it easier to calculate home-charging electricity costs. You can opt to use this method if you're eligible, or you can continue to use the actual electricity costs.

Key FBT focus area

The ATO is increasing its focus on employers who may be overlooking and misreporting FBT on private use of work vehicles when work vehicles are used for personal purposes.

Check the steps you need to take to report correctly and stay compliant. Getting it right now can help you avoid potential audits, penalties and interest charges.

For more information on your FBT obligations, see Fringe benefits tax (FBT) or speak to us.

Source: ato.gov.au March 2026
Reproduced with the permission of the Australian Tax Office. This article was originally published on https://www.ato.gov.au/businesses-and-organisations/small-business-newsroom/providing-work-vehicles-or-other-perks-to-staff
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