Reportable fringe benefits are one of the most misunderstood entries on an Australian payment summary. They do not increase the tax you pay directly — but they do affect your adjusted taxable income, which flows through to Medicare levy surcharge thresholds, HECS repayments, and several government payments. Here is what the ATO rules actually mean for you.
Reportable fringe benefits are not assessable income — you do not pay income tax on them. But they are included in your adjusted taxable income, which can reduce government payments and increase repayment obligations.
What are reportable fringe benefits?
Fringe benefits are non-cash benefits your employer provides: a company car, a laptop, salary-packaged items, entertainment. Most are subject to fringe benefits tax (FBT), which your employer pays.
A fringe benefit becomes reportable when the total taxable value of your employer-provided fringe benefits exceeds $2,000 in an FBT year (1 April to 31 March). Your employer must show a “reportable fringe benefits amount” on your payment summary or income statement.
The amount shown is grossed up using the type 2 gross-up rate (currently 1.8868). So if the actual taxable value of your benefits was $3,000, the figure on your income statement could be around $5,660.
Some benefits are exempt or excluded from the reportable system. Work-related items under the portable electronic device exemption, minor benefits under $300 in value, and certain car fringe benefits if you have a valid election in place may not need to be reported.
How reportable fringe benefits appear on your payment summary
Your employer is required to report the grossed-up value of your reportable fringe benefits on your payment summary (or income statement in myGov after Single Touch Payroll). You will see a line labelled “Reportable fringe benefits amount.”
This figure feeds into your tax return automatically if your employer reports via Single Touch Payroll. If you receive a paper payment summary, you enter it in the income section of your return.
Impact on Medicare levy, HECS, and government payments
Even though you do not pay income tax directly on reportable fringe benefits, they are added to your adjusted taxable income (ATI) for the following calculations:
Medicare levy surcharge If your income (including RFBs) exceeds $93,000 (single, 2025-26) and you do not have qualifying private hospital cover, you may pay the Medicare levy surcharge on that income.
HECS-HELP repayments Your compulsory HELP repayment is based on your repayment income, which includes your reportable fringe benefits amount. A large RFB amount can push you into a higher repayment band.
Family Tax Benefit and other means-tested payments Centrelink uses your ATI to assess eligibility for Family Tax Benefit, Child Care Subsidy, and other payments. RFBs are included in ATI, so they can reduce what you receive.
Low Income Tax Offset (LITO) and Low and Middle Income offsets Phaseout thresholds for these offsets are based on taxable income, not ATI — so RFBs generally do not affect these directly.
Superannuation co-contribution The income threshold for the super co-contribution uses ATI, which includes RFBs.
Reducing reportable fringe benefits with employee contributions
If you make an employee contribution towards the cost of a fringe benefit (sometimes called a “co-contribution”), it reduces the taxable value of the benefit — and may reduce or eliminate the reportable amount.
For example, if your employer provides a car fringe benefit with a taxable value of $5,000 and you contribute $3,000 personally towards vehicle running costs, the taxable value drops to $2,000. If that brings the total below the $2,000 threshold, nothing is reportable.
This is worth discussing with your employer or a tax adviser if the reportable amount is affecting your HECS repayments or family payments significantly.
Cars and other common reportable benefits
Company car A car fringe benefit arises when an employer provides a vehicle and the employee or their family uses it for private purposes. The taxable value depends on the car’s cost and its use. See FBT Car Benefits for the calculation methods.
Salary-packaged items Items salary-packaged through a novated lease, or direct packaging of expenses like health insurance or mortgage payments, generate fringe benefits that are typically reportable.
Exempt organisations Employees of public hospitals, public ambulance services, and certain not-for-profit organisations have higher FBT exemption caps ($17,000 or $30,000 per year). Benefits within the cap are still reportable but may not generate an FBT cost for the employer.
What employees should do at tax time
If you have a reportable fringe benefits amount on your income statement, here is what to do:
- Check your income statement in myGov — confirm the figure your employer has reported before you lodge.
- Enter it in your tax return — it flows automatically via Single Touch Payroll, but verify it is present.
- Calculate your adjusted taxable income — add your taxable income, RFBs, reportable employer super contributions, net investment losses, and deductible personal super contributions.
- Review means-tested payments — if your ATI has increased, check whether any government payments need to be updated with Centrelink.
- Consider an employee contribution — if the RFB is significantly affecting your position, talk to your employer about making a contribution to reduce the taxable value before the next FBT year ends (31 March).
For employees whose work benefits include a company car, tracking private vs business kilometres accurately can make a real difference to the taxable value of that benefit. A precise kilometre log using an app like Tripbook supports both the employer’s FBT calculation and any election you make to use the operating cost (logbook) method.
For more on how car benefits interact with FBT, see: FBT Exempt Vehicles Australia
Accurate records reduce your FBT exposure. Download Tripbook to track business and private kilometres and keep your reportable fringe benefits amount as low as possible.
