NZ Fringe Benefit Tax Calculator
Calculate FBT on vehicles, loans, and other benefits. Compare single rate vs alternate rate to find the cheapest method.
Key Takeaway
FBT is paid by employers, not employees. Using the alternate rate method can significantly reduce FBT costs for lower-paid employees.
63.93%
Single Rate
20%
Vehicle Rate (of cost/year)
5.77%
Benchmark Interest Rate (Q1 2026)
Quarterly
Filing via IR420
Used to determine alternate rate tier
Vehicle valuation rates from 1 April 2026
The calculator supports all three IRD vehicle valuation bases. Tax book value cannot fall below the applicable statutory minimum, and employee contributions reduce the taxable benefit for the same return period.
| Basis | Quarterly | Annual | Minimum value |
|---|---|---|---|
| Cost price | 5% | 20% | None |
| Tax book value | 9% | 36% | $8,333 |
| Tax book value — Investment Boost | 10.35% | 41.4% | $7,317 |
About Fringe Benefit Tax
Fringe Benefit Tax (FBT) is a tax paid by employers on non-cash benefits provided to employees. It covers company vehicles, low-interest loans, free or discounted goods and services, employer contributions to sickness or accident insurance, and other perks.
Who pays? The employer is liable for FBT — it is not deducted from the employee's wages. FBT is an additional cost on top of salary and PAYE obligations.
Common exemptions: Employer KiwiSaver contributions, benefits under $300/quarter per employee (unclassified benefits), on-premises facilities for work purposes, and contributions to approved superannuation funds.
FBT alternate rates by employee remuneration
Instead of the flat 63.93% single rate, the alternate-rate method applies a rate based on each employee's all-inclusive pay (cash pay grossed up for benefits). Lower-paid employees attract far less FBT, so the alternate method usually costs the employer less.
| All-inclusive pay | FBT rate |
|---|---|
| Up to $13,962 | 11.73% |
| $13,963 – $45,230 | 21.21% |
| $45,231 – $62,450 | 42.86% |
| $62,451 – $130,723 | 49.25% |
| Over $130,723 | 63.93% |
Single rate 63.93%; motor-vehicle benefit 20% of GST-inclusive cost per year; low-interest-loan prescribed rate 5.77% (Q1 2026, reset quarterly).
Worked examples (single rate)
Company vehicle ($40,000 cost)
Taxable value = 20% × $40,000 = $8,000/yr. FBT = $8,000 × 63.93% = $5,114 per year (full private availability).
Low-interest loan ($50,000 at 2%)
Taxable value = (5.77% − 2%) × $50,000 = $1,885. FBT = $1,205 at the single rate.
Frequently asked questions
What is Fringe Benefit Tax (FBT)?
FBT is a tax paid by employers on non-cash benefits provided to employees — such as company vehicles, low-interest loans, subsidised goods, and other perks. It's separate from PAYE and is the employer's responsibility.
Who pays FBT — the employer or the employee?
The employer pays FBT. It is not deducted from the employee's pay. However, the cost may indirectly affect remuneration decisions.
What is the difference between single rate and alternate rate?
The single rate is a flat 63.93% applied to the taxable value of all benefits. The alternate rate varies based on each employee's total cash remuneration, ranging from 11.73% to 63.93%. The alternate rate can significantly reduce FBT for lower-paid employees.
How is FBT calculated on a company vehicle?
Choose the GST-inclusive cost-price or tax-book-value basis, apply the relevant quarterly or annual taxable-value rate, prorate for private availability days, and subtract employee contributions. Investment Boost vehicles use a separate tax-book-value rate and minimum value from 1 April 2026.
What fringe benefits are exempt from FBT?
Common exemptions include: benefits under $300 per quarter per employee (unclassified benefits), contributions to approved superannuation schemes, employer KiwiSaver contributions, and benefits provided on the employer's premises for work purposes.
When do I need to file and pay FBT?
FBT is filed quarterly using form IR420. Returns and payment are due by the 20th of the month following each quarter end (July, October, January, April). Annual filing is also available for employers using the single rate.
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Sources: IRD — Fringe Benefit Tax and IRD — ways to value motor vehicles. Last updated April 2026.
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