There are 4 different options when calculating fringe benefit tax (FBT) rates. The rate you choose depends on whether the benefit must be attributed to a particular employee, and whether you want to calculate FBT every quarter or only once a year.
The rates are:
- single rate
- short form alternate rate
- full alternate rate
- pooled alternate rate.
You need to know your filing frequency so you can choose the available rate that suits your business best.
Filing frequency for fringe benefit tax
Rates for quarterly filers
If you are a quarterly filer, in quarters 1 to 3 you can use either the:
- single rate of 63.93%
- alternate rate of 49.25%.
In quarter 4, use 1 of these options:
- if the alternate rate was used in any of the 1st 3 quarters, use the full alternate rate calculation
- if only the single rate was used in any of the 1st 3 quarters, either use the single rate or complete the full alternate rate calculation.
Rates for annual or income year filers
Annual or income year filers can use either the:
- single rate of 63.93%
- alternate rate calculation.
Alternate rate calculation
There are 3 alternate rate calculation options - the full alternate rate, short form alternate rate, and the pooled alternate rate.
Full alternate rate
A separate calculation must be done for each employee who receives an attributed fringe benefit.
The full alternate rate calculation changed from 1 April 2024. Details are in our Fringe benefit tax guide - IR409.
The thresholds used in the full alternate rate calculation are changing from 1 April 2025. This will affect returns filed for the 2026 year:
- quarter 4 returns
- income returns
- annual returns
- quarter 1, 2 or 3 returns (if you stop providing fringe benefits and employing staff).
Alternate rate 1 April 2025 – 31 March 2026 onwards
| Fringe benefit inclusive cash remuneration thresholds | Tax rate |
|---|---|
| $0 - $13,962 | 11.73% |
| $13,963 - $45,230 | 21.21% |
| $45,231 - $62,450 | 42.86% |
| $62,451 - $130,723 | 49.25% |
| $130,724 and over | 63.93% |
Alternate rate 1 April 2024 – 31 March 2025
| Fringe benefit inclusive cash remuneration thresholds | Tax rate |
|---|---|
| $0 - $12,530 | 11.73% |
| $12,531 - $40,580 | 21.21% |
| $40,581 - $55,980 | 42.86% |
| $55,981 - $129,680 | 49.25% |
| $129,681 and over | 63.93% |
Our Fringe benefit tax guide - IR409 will be updated with the new thresholds for the 2026 year.
Non-attributed benefits are pooled, and a flat rate is applied at:
- 63.93% for shareholder employees
- 49.25% for all other employees.
Short form alternate rate
The short form alternate rates are:
- 63.93% for attributed benefits
- 63.93% for non-attributed benefits to shareholder employees
- 49.25% for non-attributed benefits to all other employees.
Pooled alternate rate
You can use the pooled alternate rate to file your income year, annual or quarter 4 return.
You might choose this option if you mostly provide attributed benefits to employees who earn up to $160,000 in gross equivalent pay and up to $13,400 each in attributed benefits for the year.
Attributed benefits
The pooled alternate rates for attributed benefits are:
- 49.25% for employees who earn up to $160,000 in gross equivalent pay and up to $13,400 each in attributed benefits for the year
- 63.93% for employees earning above either of those thresholds.
For the 63.93% rate, you can choose to use 49.25% if the employee has received less than $129,681 up to 1 April 2025 and $130,724 from 1 April 2025 in net pay plus attributed benefits (all-inclusive pay) for the year.
If attributed benefits are taxed at 49.25% for some employees and 63.93% for others, 2 pools may be needed.
Non-attributed benefits
The rates for non-attributed benefits are:
- 63.93% when 1 or more recipients are major shareholders
- 49.25% otherwise.
Changing FBT rates
If you file quarterly, you can change the rate options during the year.
If you file annually, you can choose any of the 3 rate options. You can change rate options each year.
If you use the full or short form alternate rate option in any of the first 3 quarters, you must use the full or short form alternate rate option in the fourth quarter.
To find out more about FBT rates refer to our Fringe benefit tax guide - IR409.