Understanding Fringe Benefits Tax for Trade Vehicles
10 September 2026 · 6 min read · By Heaney Accounting
What is Fringe Benefits Tax (FBT)?
Fringe Benefits Tax is a tax paid by employers for certain benefits they provide to their employees, which are not salary or wages. When your business provides a car to an employee, including yourself as a director, it often triggers FBT if there is any private use of that vehicle.
When does FBT apply to your work ute?
Most trade utes are considered 'commercial vehicles' and may be exempt from FBT if private use is minor, infrequent, and irregular. However, if your employees take the work ute home every night and use it for personal errands, you likely have an FBT obligation that needs to be reported.
Important: Private use includes things like driving to the shops, school runs, or using the ute for weekend camping trips. If it's not strictly for work, it's considered a benefit.
- Establish a clear private use policy for all staff.
- Keep a valid logbook to calculate the business use percentage.
- Review the ATO exemptions for 'work-related' travel in commercial vehicles.
- Speak with your accountant to see if you qualify for the exemption.
- Driving the work vehicle to secondary jobs or non-work events.
- Allowing family members to drive the vehicle for personal errands.
- Failing to track odometer readings at the start and end of the FBT year.
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