If you provide cars, phones, gym memberships, or even meals to your staff, you might be offering fringe benefits, and that means Fringe Benefits Tax (FBT) could apply.

The Australian Taxation Office (ATO) is increasing its focus on FBT compliance in 2025. Even small errors can trigger an audit, penalties, or unexpected tax bills.

But here’s the good news: most FBT issues are avoidable if you know what to check.

At D & B Accountants Pty Ltd, we’re registered tax agents and CPAs based in Pakenham and Hobart, helping businesses across Australia stay compliant without stress. We’ve put together this simple, step by step FBT audit checklist so you can self assess before the ATO comes knocking.

✔️ Step 1: Do You Even Need to Lodge an FBT Return?

Many employers assume they don’t need to lodge because they “don’t owe FBT.” That’s a common mistake.

You must lodge an FBT return if:

• You provided any fringe benefits during the FBT year (1 April – 31 March), even if the benefit was exempt
• You want to claim an exemption (e.g., work related items, minor benefits)
• You’re unsure whether a benefit is taxable

💡 Tip: If in doubt, lodge a nil return. It shows the ATO you’re compliant and avoids red flags.

✔️ Step 2: Are Your Vehicle Records Complete?

Company cars and dual cab utes are the #1 trigger for FBT audits.

Ask yourself:

• Do you have a valid logbook covering at least 12 continuous weeks?
• Is it no older than 5 years? (Logbooks expire!)
• Does it clearly separate business vs. private use?
• Are fuel card or GPS records consistent with your logbook?

⚠️ Warning: Letting staff take vehicles home “just in case” counts as private use even if they rarely drive them personally.

✔️ Step 3: Did You Apply Exemptions Correctly?

Not all perks are FBT free. Common errors include:

Keep a simple register of all non cash benefits and why you believe they’re exempt.

✔️ Step 4: Are Your Employee Declarations Signed and Saved?

For certain exemptions (like expense payment benefits or remote area housing), you must have written declarations from employees.

Check:

• Are declarations signed before you lodge your FBT return?
• Are they kept for 5 years?
• Do they match the actual benefit provided?

Missing declarations = lost exemptions.

✔️ Step 5: Have You Calculated FBT Correctly?

If you do owe FBT, ensure your calculations are accurate:

• Use the correct valuation method (operating cost vs. statutory formula for cars)
• Include all relevant costs (fuel, registration, insurance, repairs)
• Apply employee contributions properly (they reduce FBT but only if paid in cash)

A small math error can lead to big adjustments later.

✔️ Step 6: Are Your Records Organised and Retained?

The ATO can ask for records up to 5 years after the FBT year ends. Make sure you have:

• Invoices and receipts for all benefits
• Logbooks (current and historical)
• Employee declarations
• FBT calculation worksheets
• Proof of employee contributions (bank statements)

Store them digitally with clear file names e.g., FBT_2024_Logbook_JSmith.pdf.

You Don’t Have to Do This Alone

At D & B Accountants Pty Ltd, we help small and medium businesses across Australia prepare for FBT season with confidence. As registered tax agents, BAS providers, and certified Xero advisors, we offer:

• FBT return preparation
• Logbook reviews and setup
• Benefit classification advice
• Pre lodgement compliance checks

We’re based in Pakenham, Victoria, and Hobart, Tasmania, but we support clients nationwide, online or in person.

Let us handle the details so you can focus on running your business.

Need help checking your FBT readiness?

Don’t wait for the ATO to come knocking, prevention is always cheaper than correction.

📞 Call us today or book a consultation to ensure your Fringe Benefits Tax records are audit ready.

Special Offer: Get your 2024–2025 tax return prepared for free (up to $140 value) when you refer two new clients!
Terms apply: Referred clients must be new to D & B Accountants and cannot be immediate family members.

Let’s get your finances compliant and your referrals rewarded!