--- title: Should you pay Fringe Benefits Tax (FBT) on your employee benefits? description: Learn the pros and cons of paying Fringe Benefits Tax (FBT) on employee benefits and discover tax-smart alternatives with insights from WLM Accounting. image: https://insights.wlm.com.au/hubfs/How%20to%20Prepare%20Your%20Business%20for%20EOFY%202025%20(1).png --- [![WLM_Logo_RGB_Orn50](https://insights.wlm.com.au/hs-fs/hubfs/WLM_Logo_RGB_Orn50.png?width=521&height=169&name=WLM_Logo_RGB_Orn50.png "WLM_Logo_RGB_Orn50")](http://wlm.com.au/) - [About](https://www.wlm.com.au/about/) - [Services](https://www.wlm.com.au/services/) - [Tax & Compliance](https://www.wlm.com.au/services/tax-and-compliance/) - [Strategy & Advice](https://www.wlm.com.au/services/strategy-and-advice/) - [Clients](https://www.wlm.com.au/clients/) - [Construction & Trades](https://www.wlm.com.au/clients/construction/) - [Family Business](https://www.wlm.com.au/clients/family-business/) - [Insurance & Financial Services](https://www.wlm.com.au/clients/insurance-and-financial-services/) - [Renewable Energy & Environment](https://www.wlm.com.au/clients/renewable-energy-and-environment/) - [Service-based & Other Business](https://www.wlm.com.au/clients/service-based-and-other-business/) - [Insights & Case Studies](https://insights.wlm.com.au/blog) - [Blog](https://insights.wlm.com.au/blog) - [Buying a property with a business partner](https://explore.wlm.com.au/buying_a_property_with_a_business_partner_download) - [How to minimise tax & risk with business structure](https://explore.wlm.com.au/business-structure-whitepaper-download) - [Contact](https://www.wlm.com.au/contact/) [Login](https://clientlogin-us2.karbonhq.com/4Frhz6cPZq6r) - [About](https://www.wlm.com.au/about/) - [Services](https://www.wlm.com.au/services/) - [Tax & Compliance](https://www.wlm.com.au/services/tax-and-compliance/) - [Strategy & Advice](https://www.wlm.com.au/services/strategy-and-advice/) - [Clients](https://www.wlm.com.au/clients/) - [Construction & Trades](https://www.wlm.com.au/clients/construction/) - [Family Business](https://www.wlm.com.au/clients/family-business/) - [Insurance & Financial Services](https://www.wlm.com.au/clients/insurance-and-financial-services/) - [Renewable Energy & Environment](https://www.wlm.com.au/clients/renewable-energy-and-environment/) - [Service-based & Other Business](https://www.wlm.com.au/clients/service-based-and-other-business/) - [Insights & Case Studies](https://insights.wlm.com.au/blog) - [Blog](https://insights.wlm.com.au/blog) - [Buying a property with a business partner](https://explore.wlm.com.au/buying_a_property_with_a_business_partner_download) - [How to minimise tax & risk with business structure](https://explore.wlm.com.au/business-structure-whitepaper-download) - [Contact](https://www.wlm.com.au/contact/) # News, views and more ![Charley Tarchichi](https://insights.wlm.com.au/blog/Charley%20Tarchichi) **Charley Tarchichi** 14 July 2025 — 2 min read ### Share [mailto:?subject=Should%20you%20pay%20Fringe%20Benefits%20Tax%20(FBT)%20on%20your%20employee%20benefits?&body=https://insights.wlm.com.au/blog/should-you-pay-fringe-benefits-tax-fbt-on-your-employee-benefits](mailto:?subject=Should%20you%20pay%20Fringe%20Benefits%20Tax%20(FBT)%20on%20your%20employee%20benefits?&body=https://insights.wlm.com.au/blog/should-you-pay-fringe-benefits-tax-fbt-on-your-employee-benefits) [mailto:?subject=Should%20you%20pay%20Fringe%20Benefits%20Tax%20(FBT)%20on%20your%20employee%20benefits?&body=https://insights.wlm.com.au/blog/should-you-pay-fringe-benefits-tax-fbt-on-your-employee-benefits](mailto:?subject=Should%20you%20pay%20Fringe%20Benefits%20Tax%20(FBT)%20on%20your%20employee%20benefits?&body=https://insights.wlm.com.au/blog/should-you-pay-fringe-benefits-tax-fbt-on-your-employee-benefits) ![Should you pay Fringe Benefits Tax (FBT) on your employee benefits?](https://insights.wlm.com.au/hubfs/How%20to%20Prepare%20Your%20Business%20for%20EOFY%202025%20(1).png) ## Should you pay Fringe Benefits Tax (FBT) on your employee benefits? If you're a small business owner who has provided benefits to employees—such as meals, cars, or entertainment—you might be wondering whether you need to pay Fringe Benefits Tax (FBT), and if doing so is the most cost-effective approach. Here are a few things to consider.    The FBT is at the top marginal rate of 47% irrespective of your personal tax rate. If, at the end of the year, your personal tax rate is below 47%, it might not be worthwhile to claim those expenses through your business and pay FBT. Instead, you could consider not putting the expenses through the business and treating the value as income in your own name—such as in the form of a dividend.    For example, if your marginal tax rate is 39%, you could save 8% in tax by taking that income personally instead of incurring FBT. Over $10,000 of expenses, that’s a saving of $800.   In addition to the tax rate, complex compliance can also be another key deciding factor for many business owners. The ATO requires employers to maintain detailed records and submit FBT returns annually, which adds administrative burdens and often results in extra compliance fees to prepare and lodge those returns.   Deciding whether to pay FBT or take the benefit as income isn’t a one-size-fits-all situation. However, in many cases—particularly where employees are in lower tax brackets—**providing cash equivalents or dividends for the same value may be a more efficient, flexible, and cost-effective approach** than bearing the burden of FBT**.**   ### WLM can help Paying Fringe Benefits Tax (FBT) isn’t always the most cost-effective option—especially when personal tax rates and admin costs are taken into account. At WLM Accounting, we help business owners weigh up the pros and cons of providing employee benefits through the business versus taking income personally, so you can make tax-smart, compliant decisions. 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