Fringe Benefits Tax (FBT) on work perks

What are “work perks”?

Work perks are a wonderful addition to our working lives. They can improve job satisfaction and support employee wellbeing. Examples of popular perks include on-site conveniences such as free healthy snacks or meals, ergonomic workstations, wellness programs like access to fitness classes, and mental health support such as counselling services or Employee Assistance Programs (EAPs).

Some employers also offer their own goods and services to staff at a discounted rate. This is referred to as an in-house benefit by the ATO.

What are the tax implications?

In-house benefits can incur Fringe Benefits Tax (FBT) for the employer. This is designed to ensure that all forms of employee remuneration are treated fairly and are subject to taxation. However, there are certain exemptions and concessions available for in-house benefits.

25% FBT reduction on in-house benefits

A 25% FBT reduction is available for in-house benefits.

• When an in-house benefit is provided to an employee, the taxable value (the amount on which FBT is calculated) is reduced to 75% of the market or notional value.
• For example, if you provide an employee with goods worth $100 at retail price, the taxable value for FBT purposes becomes $75.
• This effectively allows employers to provide employees with a 25% discount on retail pricing without triggering FBT.

$1,000 annual FBT concession

In addition to the above reduction, there is also a $1,000 annual concession available.

• This concession can be used to further reduce the taxable value of in-house benefits provided to each employee by up to $1,000 per FBT year.
• If the combined taxable value of in-house benefits is less than $1,000 (after applying the 25% reduction), the taxable value is reduced to nil and no FBT is payable.
• This means an employer can provide each employee with up to $1,333 in retail value of in-house benefits, at no cost to the employee, without triggering FBT.

Important exclusions

The above reductions and concessions do not apply where an in-house benefit is provided through a salary sacrifice arrangement.

Lodging an FBT return

Where non-salary benefits are provided to employees (for example, discounts on products or services), we recommend preparing an FBT return even if the final tax payable is nil.

Not only does this notify the ATO that FBT has been considered, but it also starts the ATO’s four-year “amendment clock,” during which the ATO can review and amend prior FBT returns. If no FBT return is lodged, this amendment period remains open, which means that your activity could be scrutinised by the ATO indefinitely.

Published 05/02/26