The FBT Due Date for 2027: What to Do About It in September

Almost everything written about fringe benefits tax is written in May, which is the worst possible time to read it. By May the year is over. Every decision that determines what you owe was made months earlier, and the only thing left is to add it up.

It is now the middle of September. The FBT year that started on 1 April 2026 is five and a half months old and has six and a half months left to run. That is the useful window, and it is open right now.

The Year You Are In Now

The FBT year does not follow the financial year. It runs from 1 April to 31 March, which puts it three months out of step with everything else you lodge. The year currently running started on 1 April 2026 and ends on 31 March 2027. It is usually called the 2027 FBT year, after the year it ends in.

That offset causes more trouble than the tax itself. A business that thinks in financial years will reach 30 June, close the books, and assume the fringe benefits question is settled. It is not. The FBT year has another nine months to run at that point, and the logbook that was never started in April is still not started.

Fringe benefits tax is paid by the employer, not the employee, at a flat 47% on the grossed-up value of benefits provided to employees or their associates. Grossing up is the mechanism that makes the tax equivalent to what the employee would have paid on the equivalent salary at the top marginal rate.

• Type 1 benefits, where you were entitled to a GST credit, gross up at 2.0802.
• Type 2 benefits, where you were not, gross up at 1.8868.

The practical consequence of a 47% rate on a grossed-up figure is that a benefit costing you $1,000 can generate close to $1,000 of tax. FBT is not a rounding error, and it is the reason a $3,000 Christmas function is worth thinking about in October rather than discovering in May.

The Two Dates That Matter

For the FBT year ending 31 March 2027, there are two lodgement dates and which one applies to you depends entirely on how you lodge.

The condition on the later date is the part people miss. The extension is not automatic because you happen to have an accountant. You have to be on the agent's FBT client list with the ATO by 21 May 2027, and the return has to be lodged electronically. A new client who appears in June has no extension, and the original date applies retrospectively.

If you want the June date, the administrative step happens in May at the latest, and there is nothing stopping it happening now.

Lodgement and Payment Are Separate

Lodging the return and paying the liability are two different obligations with two different consequences, and conflating them is expensive.

If you lodge on time and cannot pay, you are dealing with a payment problem: the general interest charge accrues on the balance, and you can enter a payment plan. If you do not lodge at all, you have a payment problem and a lodgement problem, and the second one carries its own penalty on top.

The rule that follows is simple enough to be worth stating plainly: lodge on time regardless. Even when the money is not there. Lodging a return you cannot yet pay is a far better position than not lodging.

The other reason to lodge is the period of review. Once you lodge an FBT return, the ATO generally has three years from lodgement to amend the assessment. If you never lodge, that clock never starts, and the year stays open indefinitely. An unlodged 2019 FBT return is still reviewable today.

If You Paid FBT Last Year You Are Already Paying It

If your FBT liability for the previous year was $3,000 or more, you do not wait until May to pay. The ATO puts you onto quarterly FBT instalments, which appear on your business activity statement.

The instalments are based on last year's liability, so they are an estimate. The annual return reconciles them: if the instalments exceeded what you actually owe you get the difference back, and if they fell short you pay the balance on the lodgement date.

Two things follow from this. The first is that a business whose fringe benefits have grown since last year is under-paying through the year and will face a balancing payment in May or June. The second is that a business that has stopped providing benefits, sold the vehicle, or lost the employee who had it, can vary the instalment down rather than lending the ATO money for a year. The variation is made on the BAS, and it is worth doing when the circumstances have genuinely changed.

Why the Work Happens Before 31 March

FBT is a record-keeping tax more than a calculation tax. Almost every reduction available to you depends on a document that has to exist before the year ends, and cannot be created afterwards.

The vehicle is nearly always the largest item. A car is treated as available for private use whenever it is garaged at an employee's home, whether or not it is actually driven. There are two valuation methods.

• Statutory formula. 20% of the car's base value, reduced only by days the car was genuinely unavailable and by employee contributions. No logbook required.
• Operating cost. Total running costs for the year multiplied by the private-use percentage, which requires a valid logbook.

A logbook covers 12 continuous weeks, is valid for five years unless the pattern of use changes, and must be started while the year is running. A vehicle with genuinely high business use can be far cheaper under the operating cost method, but only if the logbook exists. There is no retrospective version.

Employee contributions work the same way. An employee who pays you towards the running cost of the car reduces the taxable value dollar for dollar, but the contribution must actually be made and the GST on it accounted for. A journal entry created in May to describe a payment that never happened is not a contribution.

Other items worth getting right while the year is open:

• Entertainment. Meals and functions for employees are generally fringe benefits. The minor benefits exemption can cover benefits under $300 that are infrequent and irregular, but the test is applied per benefit, per employee, and consistent monthly catering is not infrequent.
• Car parking. Employer-provided parking is a benefit where commercial parking within one kilometre exceeds the daily threshold, which is $11.03 for the year ending 31 March 2027. Small businesses meeting the turnover and premises conditions may be exempt.
• Work devices. Portable electronic devices used primarily for work are generally exempt, and small businesses can provide more than one similar device in a year without losing the exemption.
• Loans and debt waivers. An interest-free or low-interest loan to an employee, or forgiving one, is a fringe benefit.
• Declarations. Several reductions depend on an employee declaration, and the declaration has to be held by the time the return is lodged.

Lodge Even When the Answer Is Nil

If you are registered for FBT and your taxable value for the year comes to nil, you are not technically required to lodge a return. You are required to tell the ATO that no return is due, using a notice of non-lodgement.

In practice, many employers with a nil result lodge anyway, and there is a reason for it beyond tidiness. A lodged return starts the three-year period of review. Silence does not. If your position is that the vehicle is exempt or that the entertainment fell within the minor benefits rule, lodging puts a time limit on how long that position can be questioned.

This is a judgement call worth having with your accountant rather than defaulting either way. The cost of lodging a nil return is small. The cost of an open-ended review period on a position you were confident about is potentially not.

What Being Late Costs

Failure to lodge on time attracts a penalty calculated in penalty units. For a small entity it is one penalty unit for each 28 days the return is late, up to a maximum of five units.

The penalty unit rose to $364 on 1 July 2026. For a small entity that puts the maximum failure to lodge penalty at $1,820 per return. Medium entities pay double, large entities five times.

Separately, the general interest charge accrues on unpaid FBT from the due date. It compounds daily and is not deductible. On a liability of any size it overtakes the lodgement penalty quickly.

Penalties can be remitted where there is a reasonable explanation and a good compliance history, and the ATO does remit them. That is a reason to ask, not a reason to rely on it.

What Changes on 1 April 2027

One item worth having on the radar if you are choosing a vehicle this year.

The FBT exemption for eligible zero and low emissions vehicles has applied to electric cars below the luxury car tax threshold for fuel-efficient vehicles, which is $91,661 for 2026-27. Plug-in hybrids stopped being eligible on 1 April 2025, other than under a pre-existing binding financial commitment.

The 2026-27 Budget announced that the exemption will be phased down from 1 April 2027 rather than continuing in its current form. As at September 2026 that is an announcement, not law. Draft legislation has not been released and the detail of the phase-down is not settled.

The practical position: the full exemption applies for the FBT year ending 31 March 2027. If you are structuring a novated lease or a fleet purchase that runs past that date, the treatment beyond 31 March 2027 is not yet certain, and a decision made on the assumption that the current exemption continues indefinitely is a decision made on an assumption.

Frequently Asked Questions

When is the FBT return due for the year ending 31 March 2027?

21 May 2027 if you lodge it yourself, or 25 June 2027 if a registered tax agent lodges it electronically and you are on that agent's FBT client list by 21 May 2027. Payment falls on the same date as lodgement in both cases.

Do I have to register for FBT?

You register if you provide fringe benefits. If the answer for a year turns out to be nil, you can stay registered and lodge a notice of non-lodgement, or cancel the registration if you have genuinely stopped providing benefits.

Is a ute automatically exempt?

No. Certain commercial vehicles are exempt where private use is limited to travel between home and work plus use that is minor, infrequent and irregular. A dual cab used for the weekend is not within that limit. The ATO publishes a practical compliance guideline with a private travel threshold, and the exemption depends on meeting it, not on the shape of the vehicle.

Can I still start a logbook for this year?

Yes. A logbook covers 12 continuous weeks, and there are more than 12 weeks left before 31 March 2027. Starting one in October gives you a valid logbook for this year and the four years after it.

Does the Christmas party attract FBT?

It depends on cost per head, where it is held, and who attends. Under $300 per employee with the function held infrequently can fall within the minor benefits exemption. Where the exemption applies you also lose the income tax deduction and the GST credit for that cost, so the question is worth asking before you book rather than after.

What if I have not lodged for several years?

Lodge. The period of review has not started on any of those years and the failure to lodge penalty accrues per return. Voluntary disclosure before the ATO contacts you generally attracts a materially lower penalty than the same disclosure afterwards.

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The FBT due date is a deadline for reporting, not for deciding. What you will owe on 21 May 2027 is being determined right now, by whether a logbook is running, whether contributions are actually being paid, and whether the entertainment is being recorded as it happens.

Trew North Accounting handles FBT returns and instalment variations for Melbourne employers, and reviews vehicle and benefit arrangements while there is still time to change them. See our accounting and tax planning and small business accounting services, or get in touch.

This article is general information, not advice for your circumstances. Rates, thresholds and dates change. Check current requirements with the ATO or with us before you lodge.