Fringe Benefit Tax Calculator 2025/26
Calculate FBT on company vehicles, low-interest loans, and other employee benefits. Compare single rate (49.25%) versus alternate rate to find your optimal method.
Try a common scenario
How to Use This Calculator
Tab "Motor Vehicle"
Enter the GST-exclusive purchase price of the vehicle, the number of days it was available for private use during the quarter (max 91), and the private-use percentage. If you use the alternate rate, select the employee's marginal tax rate. The calculator shows FBT payable per quarter and per year, the effective FBT cost as a percentage of the vehicle value, and a comparison between single and alternate rates.
Tab "Low-Interest Loan"
Enter the outstanding loan balance and the interest rate you actually charge the employee. IRD's prescribed interest rate (currently ~6.99% p.a.) is the benchmark. If you charge 0%, the entire interest benefit is taxable. The calculator shows the FBT on the interest spread, per quarter and per year.
Tab "Other Benefits"
Enter the total market value of non-cash benefits (gifts, health insurance, subsidised meals, discounted goods). The calculator checks whether you are within the $300/quarter de minimis threshold per employee. If the threshold is exceeded, FBT applies to the excess only.
The Formulas
Taxable value = Cost price × 20% × Private use %
Quarterly taxable value = Annual value ÷ 4 × (Days available ÷ 91)
FBT payable:
FBT = Taxable value × FBT rate
Single rate: 49.25%
Alternate rate: based on employee marginal rate (10.5%→11.73%, 17.5%→21.15%, 30%→42.86%, 33%→49.18%, 39%→63.64%)
Low-interest loan:
Annual benefit value = Loan balance × (Prescribed rate − Actual rate)
Quarterly FBT = (Annual benefit value ÷ 4) × FBT rate
Other benefits — de minimis rule:
If total unclassified benefits ≤ $300/quarter per employee: no FBT
If total > $300: FBT = (Total − $300 × employees) × FBT rate
Filing deadlines (quarterly):
Q1 (Jan–Mar): 20 April
Q2 (Apr–Jun): 20 July
Q3 (Jul–Sep): 20 October
Q4 (Oct–Dec): 20 January
All rates from Inland Revenue (IRD) for the 2025/26 tax year. FBT is governed by the Income Tax Act 2007 (Part CX) and the Tax Administration Act 1994.
Example
Company car — $40,000 vehicle, 100% private use, single rate
A Wellington employer provides a sales manager with a $40,000 car (GST-exclusive). The car is available for all 91 days of the quarter, and all use is treated as private.
The employer pays $3,940 per year in FBT on top of the vehicle running costs. If the employee's marginal rate is 17.5% (income ~$30K), the alternate rate of 21.15% would reduce annual FBT to approximately $1,692 — saving $2,248 per year. Always compare methods.
FBT Key Facts for NZ Employers
| Item | Detail |
|---|---|
| Standard FBT rate | 49.25% (single rate — simplest) |
| Alternate rate range | 11.73% to 63.64% (based on employee marginal tax rate) |
| Vehicle taxable value | 20% of cost price p.a. (GST-exclusive), or tax book value after year 5 |
| Loan benefit value | Balance × (IRD prescribed rate − actual rate) |
| Prescribed interest rate (2025/26) | ~6.99% p.a. (IRD updates quarterly) |
| De minimis — unclassified benefits | $300/quarter per employee (no FBT below this) |
| Filing frequency | Quarterly (or annual if FBT liability < $500 p.a.) |
| Filing deadline | 20th of month after quarter end |
| Exempt: KiwiSaver | Employer compulsory contributions (3%+) fully exempt |
| Exempt: car parking | On-premises employer car parks generally exempt |
| Exempt: work tools | Laptops, phones used mainly for work — generally exempt |
| Governing law | Income Tax Act 2007 (Part CX), Tax Administration Act 1994 |
Single Rate vs Alternate Rate — Which Should You Use?
The single rate method (49.25%) applies one flat rate to all fringe benefits. It's simple, requires no per-employee calculations, and avoids attribution. Most small employers use this method.
The alternate rate method applies each employee's marginal income tax rate to their benefits. It can be significantly cheaper if you have employees on lower tax brackets — but it requires tracking each employee's income and attributing benefits individually. It also requires a "wash-up" calculation at year end (31 March).
The short-form alternate rate is a hybrid: use 49.25% for attributed benefits where the employee's income (including the benefit) exceeds $160,000, and use the employee's marginal rate for all other attributed benefits. For unattributed benefits (pooled), a 49.25% rate applies.
Key insight: FBT at 49.25% means providing a $10,000 benefit costs the employer $14,925 in total (benefit + FBT). In many cases, it is cheaper to give a salary increase — the employee pays PAYE, which is lower than FBT for most income levels. Run the numbers before deciding how to structure employee remuneration.
Common FBT Mistakes NZ Employers Make
- Not registering for FBT — IRD actively audits employer tax obligations. If you provide any non-cash benefits (even a company phone), you likely have FBT obligations.
- Using GST-inclusive vehicle price — FBT is calculated on the GST-exclusive price. Using the GST-inclusive figure overstates your liability.
- Missing the de minimis threshold — Small gifts and benefits under $300/quarter per employee are exempt. Many employers unnecessarily pay FBT on qualifying small items.
- Not comparing single vs alternate rate — For lower-income employees, the alternate rate can save thousands per year.
- Treating KiwiSaver contributions as taxable — Employer KiwiSaver contributions are exempt from FBT. Only voluntary contributions above the compulsory rate may attract FBT in some circumstances.
- Forgetting wash-up calculations — If using the alternate rate, a full-year wash-up at 31 March is required to true up against the actual annual rates.