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Fringe benefit tax (FBT)
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Fringe benefit tax (FBT)

Fringe benefit tax (FBT): Calculating fringe benefit tax

Single rate

From 1 October 2010 personal tax rates have changed, so the higher FBT rates of 61% and 61.29% have reduced to 49.25%. The following information is using the rates from 1 October 2010 onwards. If you're calculating your FBT requirements for periods prior to 1 October 2010, you'll need to use the previous rates.

You can choose to pay fringe benefit tax at the single rate option of 49.25% on all benefits you provide to employees, including shareholder-employees.

However, if an employee who receives a fringe benefit earns under $70,000, the 49.25% FBT rate effectively over-taxes their fringe benefits. To deal with this situation, we also have an alternate rate calculation process for fringe benefit tax.

Quarterly returns

If you file quarterly returns and have chosen to pay the single rate option of 49.25% in the first three quarters you can:

  • pay 49.25% in the fourth quarter
  • use the alternate rate calculation in the fourth quarter.