Salary Sacrifice Work-Related Benefits FBT Changes from 1 April 2027
From 1 April 2027, the Fringe Benefits Tax (FBT) rules for salary sacrifice work-related benefits will undergo significant changes. The table below outlines the key changes to help you understand how to adjust your FBT compliance strategy.
FBT Changes Summary
| Benefit Type | Current Rules (Before 1 April 2027) | New Rules (From 1 April 2027) |
|---|---|---|
| Salary sacrifice work-related expenses within the standard deduction (home office expenses, phone, education) | Can use the "other deductible rules" to reduce FBT liability | Cannot use "other deductible rules" – FBT applies |
| Salary sacrifice work-related items (portable electronic devices, computer software, protective clothing, briefcases, industry tools) | FBT exempt | No longer FBT exempt – FBT applies |
| Non-salary sacrifice work-related items (multiple items with same function) | Limited to one exempt item per employee per financial year; small businesses only | Multiple items with same function can be provided FBT-free; extended to all employers |
| Expenses not covered by standard deduction or non-salary sacrifice expenses | Can continue using "other deductible rules" | Can continue using "other deductible rules" |
| Non-salary sacrifice work-related items | FBT exempt | Remain FBT exempt |
Act Now to Ensure Compliance
To ensure your FBT compliance after 1 April 2027, we recommend you take the following steps now:
- Review all salary sacrifice work-related benefits and items currently provided
- Identify which benefits will be affected by the new rules
- Calculate your potential FBT liability under the new rules
- Consider adjusting your benefit policies or the way benefits are structured
- Ensure comprehensive record-keeping in preparation for your 2027–28 tax return
Taking action now will help you avoid compliance issues and make informed decisions about your employee benefit arrangements.
