FBT assessments

The FBT year#

The FBT year runs from 1 April to 31 March in both Australia and New Zealand. For example, the 2025–2026 FBT year is 1 April 2025 to 31 March 2026.

Calculation methods#

An assessment calculates each vehicle's taxable value under every method that applies, for a chosen FBT year, and recommends the method with the lowest value.

Statutory Method#

Taxable value = Cost base × 20% × Days available / 365 − Employee contributions

• Cost base: the vehicle's purchase price or market value.
• Days available: the days in the FBT year, less the days the vehicle was genuinely unavailable, based on its status history (for example while in service or after being decommissioned).
• Employee contributions: the total contributions for the vehicle in that FBT year.

No logbook is needed. It is simple to administer and suits vehicles with high private use (over 50%).

Operating Cost Method#

Taxable value = Total operating costs × Private use % − Employee contributions

• Total operating costs: fuel, repairs, maintenance, registration, insurance and tolls, plus deemed depreciation and imputed interest for owned vehicles, or lease payments for leased vehicles.
• Private use %: 100% minus the business use percentage from the vehicle's validated logbook period.

This method is available only when the vehicle has a validated logbook period.

Mileage Rate Method (New Zealand only)#

Business kilometres × the IRD mileage rate per km ($0.99/km for 2025–26).

Vehicle financial data#

Enter each vehicle's financial data on its Financial tab (open the vehicle, then Financial).

Operating cost summary#

The Financial tab also shows the vehicle's operating costs for the current and previous FBT years:

See Registers for recording these costs.

Depreciation, interest and leases#

For owned vehicles:

• deemed depreciation uses 25% diminishing value for vehicles acquired after April 2006, or 18.75% before: Depreciated value = Cost base × (1 − Rate)^Years, and the annual depreciation is the change over the FBT year;
• imputed interest is the depreciated value × the benchmark interest rate set for your organisation.

For Leased and Novated Lease vehicles, the yearly lease payments replace deemed depreciation and imputed interest.

Running assessments#

Assessments can be run for one vehicle or for the whole fleet, for a chosen FBT year. A fleet assessment skips vehicles with no cost base and decommissioned vehicles. Each assessment is saved.

For New Zealand organisations, the NZ Quarterly FBT report shows each quarter's assessment, with an Assess action for quarters that haven't been assessed:

• Q1: April–June
• Q2: July–September
• Q3: October–December
• Q4: January–March

Choosing a method#

After an assessment, Vectis sets a recommended method: the one with the lower taxable value. A Finance Administrator can choose a different method for a vehicle when there's a reason to.

Employee contributions#

Employee contributions reduce FBT. Each contribution is recorded against a vehicle and an FBT year, with an amount, a description and a date. Contributions are added up and deducted in both the Statutory and Operating Cost calculations.

Gross-up#

Assessments include gross-up values for reporting:

Australia and New Zealand compared#

Which rules apply to a vehicle#

1. The vehicle's FBT Jurisdiction Override, if set.
2. Otherwise, the organisation's Default FBT Jurisdiction.
3. If neither is set, Australian rules.