Fringe Benefit Tax (FBT) Return
FBT returns report and pay the tax on non-cash benefits provided to employees: company vehicles available for private use, low-interest loans, employer-subsidised insurance, and other fringe benefits. Employers can elect annual or quarterly filing. Most SMEs file quarterly unless their annual FBT liability qualifies them for annual filing.
Who this applies to
- All employers who provide non-cash fringe benefits to employees, including shareholder-employees
- Companies with vehicles available for employees' private use (including overnight storage at an employee's home)
- Employers providing low-interest loans, subsidised insurance, or other benefits to employees
What to file
IR420 Quarterly FBT Return, or IR421 Annual FBT Return. The quarterly return (IR420) requires calculating the taxable value of each benefit type per employee (or per pool for unattributed benefits) and applying the FBT rate.
How to file
Via myIR at my.ird.govt.nz or via a registered tax agent using IRD-approved software.
Payment due
Same date as the filing deadline for each quarter or the annual return.
Penalties for missing this deadline
Late filing: NZD 250 per late return. Late payment: 1% on the day after the due date, 4% seven days later. Use-of-money interest (UOMI) accrues on unpaid FBT from the due date.
Filing checklist
- Identify all employees (including shareholder-employees) who received fringe benefits in the period
- Calculate the taxable value of each benefit: for vehicles, 20% of cost per quarter for full private availability
- Apply the correct FBT rate — attributed benefits rate (49.25% if employee's annual gross exceeds NZD 160,000 or 42.86% otherwise); unattributed benefits at 49.25%
- Check whether electric vehicles are included — EV FBT exemption was removed from 1 April 2025
- Confirm filing frequency election (annual vs quarterly) is appropriate for current FBT liability level
Documents you'll need
- Vehicle cost and availability records for each company vehicle
- Details of any low-interest loans to employees showing actual interest versus market rate
- Records of any employer-subsidised insurance or other fringe benefits provided
Common mistakes to avoid
- Assuming electric vehicles are still FBT-exempt after 1 April 2025 — the exemption was removed and EVs are now subject to standard FBT rules
- Not applying FBT to a vehicle available on weekends or stored at an employee's home — availability triggers FBT even if the vehicle is not actually used privately
- Missing the modified Q4 deadline of 20 January (not 28 January) because the standard quarterly due-date pattern is assumed
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