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)
6.07%
Benchmark Interest Rate (from 1 Oct 2026)
Quarterly
Filing via IR420
Used to determine alternate rate tier
Days the vehicle was available for private use, less work-related-vehicle days.
Taxable benefit
FBT Single Rate
63.93%
FBT Alternate Rate
11.73%
Quarterly payment
Using alternate rate
Value used
$40,000.00
Valuation rate
20.00%
Availability period
365 days
Single Rate
Flat 63.93% on all benefits
$5,114.40
Alternate Rate
11.73% based on employee salary
$938.40
RecommendedSaving of $4,176.00 per year using the alternate rate method.
Filing Reminder
Most employers file quarterly using form IR420. Annual and income-year filing options apply only in specific circumstances.
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, unclassified benefits of $300 or less per employee per quarter ($1,200 in an income-year or annual return, with a $22,500 yearly limit for all employees), 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 6.07% (from 1 Oct 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 = (6.07% − 2%) × $50,000 = $2,035. FBT = $1,301 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: unclassified benefits of $300 or less per employee per quarter ($1,200 in an income-year or annual return), while total unclassified benefits stay within $22,500 a year for all employees, 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. Quarterly returns and payment are due on 20 July, 20 October and 20 January, and 31 May for the quarter ending 31 March. Annual returns (due 31 May) can be elected if you provide fringe benefits to employees who are not shareholder-employees and your gross PAYE and ESCT in the previous year was $1,000,000 or less.
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Sources: IRD — Fringe Benefit Tax and IRD — ways to value motor vehicles.
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