FBT Calculator NZ 2026

Calculate Fringe Benefit Tax (FBT) for your New Zealand business. This NZ FBT calculator covers the three most common fringe benefit scenarios: motor vehicles available for private use, low-interest or interest-free loans, and other general fringe benefits. Choose the single rate (63.93%) or the alternate rate (49.25%), and the calculator returns the taxable value of the benefit, the FBT payable for the quarter, and the annualised FBT liability.

What is FBT?

Fringe Benefit Tax (FBT) is a tax employers pay to Inland Revenue on non-cash benefits provided to employees in addition to their salary or wages. FBT is the employer's liability, not the employee's. It is filed and paid quarterly (with a wash-up in the fourth quarter), or annually for smaller employers (PAYE under $1 million per year). Common fringe benefits subject to FBT include company vehicles available for private use, interest-free or low-interest loans, and subsidised or free goods and services.

FBT rates for 2026/27

There are two FBT rates in New Zealand for the 2026/27 year:

• Single rate: 63.93%. This is the default rate. It applies to the taxable value of all fringe benefits regardless of the employee's income. The single rate was increased from 49.25% to 63.93% on 1 April 2021 when the top personal income tax rate of 39% was introduced for income over $180,000.
• Alternate rate: 49.25%. This can be used in quarters 1 to 3 only, typically for employees whose total cash income plus attributed fringe benefits is less than $180,000 for the tax year. If the alternate rate is used in any of the first three quarters, a wash-up calculation must be performed in quarter 4 using one of the three alternate rate calculation options (full alternate, short-form alternate, or pooled alternate).

Most small employers use the single rate of 63.93% in all four quarters for simplicity, as it requires no wash-up calculation. Larger employers with employees earning under $180,000 often benefit from the alternate rate calculation, as it reduces the total FBT payable. Always speak with a tax adviser before choosing between the methods.

Quarter 4 (March quarter) wash-up options

If you use the alternate rate of 49.25% in any of the first three quarters, your quarter 4 return must use one of three calculation options:

• Full alternate rate: A separate calculation is done for each employee receiving attributed benefits, based on their total remuneration (net income plus total fringe benefits). The applicable FBT rate (49.25% or 63.93%) is then applied based on the employee's all-inclusive pay band.
• Short-form alternate rate: All attributed benefits are taxed at 63.93% regardless of the employee's income. Non-attributed benefits use the 49.25% pool (or 63.93% pool for major shareholder-employees). Easier than the full alternate rate but may overtax some employees.
• Pooled alternate rate: Attributed benefits use 49.25% for employees whose total remuneration is under $130,724 for the 2026 year (and who receive $13,400 or less in attributed benefits and $160,000 or less in cash income), and 63.93% for all others.

Motor vehicle FBT

If an employee has a company vehicle available for private use, the taxable value can be calculated using either:

• Cost price method: 5% of the GST-inclusive cost price per quarter (20% annually). This is the most common method.
• Tax book value method: 9% of the GST-inclusive depreciated value per quarter (36% annually). The tax book value cannot fall below $8,333 (GST-inclusive). This method results in lower FBT for older vehicles.

The full quarterly formula under Section RD 29(5)(a) of the Income Tax Act 2007 is:

Taxable value = (Rate × Value × Days available) ÷ 90

The divisor is always 90 days, regardless of how many actual days are in the quarter. Some quarters have 91 or 92 calendar days (the September quarter has 92), but the IRD formula caps "days available" at 90. This means a vehicle that is fully available for private use throughout the entire quarter results in (Rate × Value × 90) ÷ 90 = Rate × Value, which is exactly 5% of cost (or 9% of tax book value).

Days the vehicle is treated as not available for private use:

• Any 24-hour period the vehicle is unavailable for repairs or maintenance
• Days the employee is away on a business trip for at least 24 hours and uses the vehicle as part of the trip
• Days the vehicle is used for an emergency call-out (essential plant, services, or health/safety, between 6pm and 6am on weekdays or any time on weekends and public holidays)
• Days the vehicle qualifies as a "work-related vehicle" (permanent business signage, gross laden weight 3,500 kg or less designed primarily for goods, written private-use restriction, and quarterly compliance checks)

Once a method is chosen for a vehicle, the employer must use it for at least 5 years. The taxable value is also reduced for any cash contribution the employee makes for private use. FBT applies whenever the vehicle is available for private use, even if it is not actually used. A vehicle parked at the employee's home overnight is generally considered available for private use unless it qualifies for the work-related vehicle exemption.

Three-month test period option: Instead of recording exempt days every quarter, employers can run a 3-month test period (must be a full quarter for quarterly filers) and use those results for the next 3 years.

FBT on low-interest loans

If an employer provides an employee with a loan at a rate below the IRD prescribed rate, FBT applies to the interest rate shortfall. The taxable value each quarter is the difference between the prescribed rate and the actual rate charged, applied to the average loan balance for that quarter. The prescribed rate changes each quarter, so always check ird.govt.nz for the rate applicable to the quarter you are filing for.

Recent prescribed interest rates:

• From 1 January 2026: 5.77%
• 1 October 2025 to 31 December 2025: 6.29%
• 1 July 2025 to 30 September 2025: 6.67%
• 1 April 2025 to 30 June 2025: 7.38%
• 1 October 2023 to 31 March 2025: 8.41%

FBT on other benefits and the de minimis exemption

FBT also applies to other benefits such as employer-paid medical insurance, free or subsidised goods and services, and contributions to non-KiwiSaver superannuation funds. A de minimis exemption applies to "unclassified" fringe benefits: if the total per employee is $300 or less per quarter and the total per employer is $22,500 or less per annum, no FBT is payable on those unclassified benefits. If either threshold is exceeded, FBT is payable on the full amount.

FBT filing dates

Quarterly FBT returns are due within 20 days of the end of each quarter:

• Quarter 1 (April to June): Return due 20 July
• Quarter 2 (July to September): Return due 20 October
• Quarter 3 (October to December): Return due 20 January
• Quarter 4 (January to March, with wash-up): Return due 31 May

Employers with PAYE and ESCT deductions of $1 million or less in the previous tax year may file annually (return due 31 May) or on an income year basis. Close companies providing vehicles only to shareholder-employees may elect to apportion vehicle expenses between business and private use rather than paying FBT.

Important: this is an estimate

This calculator provides an estimate only based on the simplified single-employee, single-benefit scenario and the rates in effect at the time of filing. FBT calculations involving multiple employees, non-attributed benefit pools, the full or pooled alternate rate options, work-related vehicle classifications, and quarter 4 wash-ups can be considerably more complex. Always verify your FBT obligations with a chartered accountant or registered tax agent, and refer to the official IRD Fringe Benefit Tax guidance.

Sources and references

• IRD: Calculation options and rates for FBT (single rate 63.93%, alternate rate 49.25%)
• IRD: Prescribed interest rates for FBT (5.77% from 1 January 2026)
• IRD: Employer-provided motor vehicles (cost price 5% / tax book value 9% per quarter)
• IRD: Full alternate rate calculations
• Income Tax Act 2007, Subpart RD (FBT) and Subpart CX (definition of fringe benefits)