Get ready for the end of Fringe Benefits Tax year

What if I don’t reach the cap limit within this FBT year?

If you have unspent funds in your salary packaging account on 31 March 2026, they will carry over for you to use in the new FBT year starting 1 April 2026. However, your annual cap limit will remain the same and won’t roll over for the new FBT year.

If I reach my FBT exemption cap early, what happens to my ongoing contributions?

Unless you advise us otherwise, RemServ will continue deducting your allocated salary packaging contributions from your pre-tax pay. These funds will accumulate in your RemServ account for you to spend in the new FBT year. Please keep in mind that any accumulated funds will be counted towards your new cap limit for next FBT year when you claim or spend.

If you want to pause your contributions, you can email [email protected] to place a temporary hold on your payroll contributions for the remainder of this FBT year. They will then automatically recommence when the new FBT year starts on 1 April.

NOTE: Any changes to your account can take up to two pay cycles to come into effect.

What happens if I reach the FBT exemption cap early?

If your salary packaging account reaches your FBT exemption cap limit early, RemServ will notify you before the end of the FBT year with the available options you can consider taking to manage your account.

If you do reach your FBT exemption cap before 31 March, your ongoing payments for your capped benefits will be placed on hold. These payments will automatically resume on your first regular pay day in the new FBT year (from 1 April).

However, your salary packaging contributions will continue to be deducted from your pay and sent to your RemServ account for the remainder of the FBT year, unless you notify us otherwise. If you use these accumulated funds in the new FBT year (1 April 2026 – 31 March 2027), they will be counted towards your new exemption cap. Please remember the cap limit remains the same each year (for example, $15,900 for living expenses for eligible charity workers). Any unspent funds carried into the new FBT year will form part of the new cap limit when you claim or spend.

Please note that RemServ cannot make automatic catch-up payments for amounts missed while your regular payments are on hold, including home loan and rental expenses. During this time, please make alternative arrangements to manage your account and expenses until the new FBT year commences on 1 April.

If you reach the FBT cap, this won't affect payments to benefits which fall outside your FBT exemption limit, such as work-related expenses such as professional memberships, self-education/professional development and/or portable electronic devices.

What is the end of FBT year, and how does it affect me?

Australian Tax Office (ATO) legislation requires a certain amount of Fringe Benefits Tax (FBT) to be paid on your novated lease.

The amount of FBT is based on the taxable value associated with your vehicle.

Depending on the type of car and the employer you work for, you may have options for offsetting your FBT, if required. These options include the Employee Contribution Method (ECM), where a post-tax contribution, equivalent to the taxable value of your vehicle, is deducted from your pay within the current FBT year, which is from 1 April to 31 March.

Most customers will not be impacted, and there is likely nothing they need to do prior to the end of the FBT year. If you are required to take action, we will be in touch.

Some customers – especially those who have recently begun a novated lease – may need to readjust their post-tax contributions to meet ATO requirements and reduce any FBT amount payable.

Why do my contributions differ from my proposal?

One of the most common questions we get at this time of year is, “Why does my contribution amount differ from my original proposal?”

The answer is that each time we provide you with an estimate of your contributions, we use the remaining pay cycles in the FBT year (ending 31 March) to calculate the numbers. As we get closer to March you may have fewer pay cycles than estimated. This is why there may be a difference in the estimate we calculated a month ago and the contribution amount you end up starting with.

We have therefore temporarily adjusted your contributions based on how many pay cycles are left and on the pro-rata FBT requirement.

The reason for this adjustment is to minimise any shortfall and potentially offset the amount of FBT you may need to pay. Your contributions will automatically return to the proposed amount from 1 April.

I'm starting a novated lease late in the FBT year – what do I need to do?

We will likely be in touch to discuss post-tax management of your lease, including whether you need to make a deposit directly to us if there are not enough pay runs to cover the required post-tax amount this FBT year.