As the Fringe Benefits Tax (FBT) year draws to a close, businesses across Australia should be reviewing how their motor vehicles are structured, used, and reported.
With increasing focus on compliance—and growing interest in electric vehicles (EVs)—FBT is an area where many businesses either miss opportunities or unknowingly expose themselves to risk.
This guide outlines what you need to know for the 2026 FBT year.
What is FBT and Why Does It Matter?
Fringe Benefits Tax (FBT) applies when businesses provide non-cash benefits to employees, including the use of company vehicles for private purposes.
If not managed correctly, FBT can:
- Increase your tax liability
- Trigger ATO scrutiny
- Reduce the overall efficiency of your business structure
Motor Vehicles & FBT: The Basics
A car fringe benefit generally arises when:
- A vehicle is made available to an employee, and
- It is used (or available for use) for private purposes
This includes:
- Driving to and from work
- Weekend or personal trips
Key Question:
Is your vehicle genuinely restricted to business use, or is there private usage involved?
Logbooks: Are You Up to Date?
Accurate record-keeping is critical.
A valid logbook can:
- Substantially reduce your FBT liability
- Provide evidence in case of an audit
To be compliant:
- Logbooks must cover a continuous 12-week period
- They should reflect a typical pattern of use
- They must be updated if usage patterns change
Utes & Commercial Vehicles: Are You Exempt?
Certain dual cab utes and commercial vehicles may be exempt from FBT—but this is often misunderstood.
You may qualify for exemption if:
- The vehicle is designed to carry more than 1 tonne, or
- Private use is minor, infrequent, and irregular
However, watch out:
- Regular commuting can still be considered private use
- Lifestyle use (weekends, holidays) may trigger FBT
Many businesses assume they are exempt when they are not.
Electric Vehicles (EVs): Opportunities & Considerations
The Australian Government has introduced FBT exemptions for eligible electric vehicles, creating significant tax planning opportunities.
Potential benefits:
- FBT exemption on eligible EVs
- Lower running and maintenance costs
- Alignment with sustainability goals
But eligibility matters:
- The EV must fall below the luxury car tax threshold
- It must be a zero or low-emission vehicle (e.g., battery electric or plug-in hybrid—subject to current rules)
Structuring this correctly can result in substantial savings.
Common FBT Mistakes to Avoid
- Assuming utes are automatically exempt
- Failing to maintain or update logbooks
- Not identifying private use correctly
- Missing out on EV concessions
- Leaving FBT review until the last minute
What Should You Do Before 31 March?
To stay compliant and optimise your position:
✔ Review all vehicles provided to employees
✔ Check logbooks and usage records
✔ Assess eligibility for exemptions (especially utes & EVs)
✔ Consider restructuring where needed
✔ Seek professional advice before lodging
How Certum Advisory Can Help
At Certum Advisory, we work closely with businesses to:
- Review and minimise FBT exposure
- Structure vehicle arrangements effectively
- Identify tax-saving opportunities (including EV strategies)
- Ensure full compliance with ATO requirements
Final Thought
FBT is not just about compliance—it’s an opportunity to improve efficiency and make smarter financial decisions.
With the right planning, your business can reduce costs, avoid risk, and position itself for future growth.
Need help reviewing your FBT position?
Get in touch with Certum Advisory today.
