Question 1

What is the FBT rate on cars in 2026?

Accepted Answer

The FBT rate for the 2025-26 year is 47%. The gross-up rate for Type 1 benefits is 2.0802 and for Type 2 benefits is 1.8868.

Question 2

What is the statutory formula rate for car FBT?

Accepted Answer

The statutory formula rate is a flat 20% of the car's base value, regardless of how many kilometres are driven or the split between business and private use.

Question 3

How do I choose between the statutory formula and operating cost method?

Accepted Answer

The operating cost method generally produces a lower FBT liability when business use exceeds 50%. The statutory formula method is simpler and requires less record-keeping.

Question 4

Are electric cars exempt from FBT in 2026?

Accepted Answer

Yes, battery electric vehicles and hydrogen fuel cell vehicles remain exempt, provided they meet eligibility criteria including a value below the $91,387 LCT threshold.

Question 5

Are plug-in hybrid vehicles still FBT exempt?

Accepted Answer

No, for new arrangements from 1 April 2025. Existing arrangements may be grandfathered.

Question 6

What odometer records do I need for FBT on cars?

Accepted Answer

At minimum, odometer readings at the start and end of each FBT year. If using the operating cost method, you also need a valid logbook covering at least 12 continuous weeks.

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