Reportable Fringe Benefits Amount: $2,000 Threshold and Gross-Up

A reportable fringe benefits amount is the grossed-up value of the non-cash benefits your employer gives you, and it appears on your income statement once the taxable value of those benefits passes $2,000 in an FBT year. You are not taxed on it. It does not add to your income tax bill. What it does is feed into a series of government income tests that decide things like the Medicare Levy Surcharge, HELP repayments, family assistance, and Division 293 tax.¹

Which Benefits Count

The Fringe Benefits Tax Assessment Act 1986 sets out what qualifies as a fringe benefit. The most common one employees encounter is private use of a company car. If your employer owns or leases a vehicle and you use it personally, that use is a car fringe benefit, even if the car is simply parked at your home overnight.²

Other benefits that contribute include employer-provided housing where the property is your usual residence, low-interest or interest-free loans below the statutory benchmark rate, and expense payment benefits where your employer pays or reimburses your personal costs.²

Salary-sacrificed meal entertainment and recreation benefits also count, and this is where most employees actually meet RFBA. A novated car lease packaged from pre-tax salary is the classic case. The arrangement reduces your taxable wages, but the value of the benefit shows up as RFBA on your income statement.

What’s Excluded

A handful of benefits are carved out of RFBA reporting, so the figure on your income statement may be lower than the total value of everything your employer provides. The exclusions are:

Employer-provided car parking, though reimbursements for parking expenses are reportable.
Private use of pooled or shared cars.
Meal entertainment, related travel, accommodation, and entertainment facility leasing, when not provided under a salary sacrifice arrangement.
Remote area housing assistance, home ownership and repurchase schemes, and occasional travel to a major population centre for remote area employees.
Essential health care an Australian citizen or permanent resident receives while working overseas and cannot claim through Medicare.
Security benefits provided to protect your personal safety because of your job.

These sit outside RFBA because they are either hard to attribute to individual employees or serve a purpose the government chooses not to penalise through income testing.³

The $2,000 Threshold and the FBT Year

Your employer only reports an RFBA when the total taxable value of your benefits exceeds $2,000 in an FBT year. At or below $2,000, nothing is reported and nothing flows into any income test.⁴

The FBT year runs from 1 April to 31 March, different from both the calendar year and the standard income year (1 July to 30 June). The threshold also applies per employee, per employer. Two jobs each providing $1,800 of benefits leave you with no RFBA at all, because neither employer crosses $2,000 on its own.⁵

How the Reported Figure Is Grossed Up

The number on your income statement is not the raw taxable value of your benefits. It’s grossed up to represent how much pre-tax salary you would have needed to earn to buy those benefits yourself. That conversion puts non-cash benefits on the same footing as wages for income testing.

For FBT purposes, benefits fall into two categories. Type 1 benefits, where the employer can claim a GST credit, use a higher gross-up rate of 2.0802. Type 2 benefits, where no GST credit applies, use a lower rate of 1.8868. For RFBA reporting, everything is grossed up at the Type 2 rate of 1.8868, regardless of the employer’s GST position. These rates have applied for FBT years ending 31 March 2023 through 2026.⁵⁶

The maths is simple. Multiply the taxable value of your benefits by 1.8868. A taxable value of $3,000 becomes a reported RFBA of $5,660.40. That grossed-up figure is the one that matters for every income test below.

How RFBA Affects Your Tax and Benefits

Although RFBA does not increase your income tax, it is added to your taxable income when the government works out your total position for a wide range of programs and obligations.¹

Medicare Levy Surcharge. Without appropriate private hospital cover, income including RFBA above the threshold triggers a surcharge of 1% to 1.5%.⁷
Private health insurance rebate. Your rebate tier uses income for surcharge purposes, which includes RFBA, so a higher total means a smaller rebate or none.
HELP and other study loan repayments. Repayment income combines taxable income with RFBA, net investment losses, and reportable super contributions, so RFBA can push you into a higher repayment bracket or trigger a repayment you would not otherwise owe.⁸
Child support. Adjusted taxable income for child support includes RFBA.
Family Tax Benefit and Child Care Subsidy. Eligibility and payment rates factor in RFBA.
Division 293 tax. High-income earners have their income measured with RFBA included when the extra tax on super contributions is assessed.
Government super co-contribution and low-income super tax offset. Both look at total income including RFBA.

The effect can be sharper than people expect. Someone on $90,000 salary with a $15,000 RFBA has an adjusted income of $105,000 for surcharge purposes. That single step can trigger a Medicare Levy Surcharge liability or shrink a private health insurance rebate that salary alone would have left untouched. If you sit near a HELP or family assistance threshold, even a modest RFBA can tip you over.

Charities, Hospitals, and Not-for-Profit Employees

Employees of FBT-exempt organisations sometimes assume their packaged benefits stay invisible. They don’t. If a benefit is exempt from FBT solely because of the employer’s status, your employer still has to calculate the taxable value as though the exemption did not exist and report it as RFBA.³

There is a partial concession for this group. If you work for a public benevolent institution, health promotion charity, public or not-for-profit hospital, public ambulance service, or a rebatable employer, only 53% of your RFBA counts toward eligibility for family assistance and youth income support payments. For every other income test, the full RFBA applies.¹

When RFBA Appears on Your Income Statement

Employers report RFBA through Single Touch Payroll, which sends it to the ATO and populates your income statement in myGov.⁹ The finalisation deadline is 14 July after the end of the income year. For 2025–26, employers must finalise STP data, including RFBA, by 14 July 2026.¹⁰

Watch the timing mismatch. The FBT year ends 31 March, the income year ends 30 June. Benefits provided between 1 April 2025 and 31 March 2026 generate the RFBA that appears on your 2025–26 income statement, finalised by 14 July 2026. The figure on myGov reflects the FBT year that overlaps with that income year, not the income year itself.¹⁰

Company Cars, the Usual Driver

Company cars produce the largest single share of RFBA for most employees, and the valuation method makes a big difference. The statutory formula applies a flat 20% rate to the car’s base value, regardless of kilometres travelled. That rate has been unchanged since 1 April 2014.⁵

Take a car with a $40,000 base value, available for the entire FBT year. The statutory taxable value is $8,000 (20% of $40,000). Grossed up at 1.8868, the RFBA on your income statement is $15,094.40. That number flows into every income test above. An operating cost method exists that can produce a lower taxable value when business use is high, but it requires a logbook kept for at least 12 consecutive weeks to establish the business-use percentage.

If you’re considering a novated lease or any packaged car, ask your employer or salary packaging provider for the projected RFBA before you sign. That figure, not the sticker value of the benefit, is what will shape your position on the Medicare Levy Surcharge, HELP repayments, and family assistance for the year.

1
Australian Taxation Office. Consequences of Having a Reportable Fringe Benefits Amount
2
Australian Taxation Office. Fringe Benefits Tax – A Guide for Employers
3
Australian Taxation Office. Reportable Fringe Benefits
4
Australian Taxation Office. Reportable Fringe Benefits for Employees
5
Australian Taxation Office. Fringe Benefits Tax – Rates and Thresholds
6
Australian Taxation Office. FBT Rates and Thresholds for 2025
7
Australian Taxation Office. Medicare Levy Surcharge Income, Thresholds and Rates
8
Australian Taxation Office. Study and Training Loan Repayment Thresholds and Rates
9
Australian Taxation Office. Rules of Reporting Through STP
10
Australian Taxation Office. Key Dates for Employers to Remember in 2026