Smarter FBT Record Keeping

In Conclusion

FBT season just got a little more manageable.

As of 1 April 2024 (i.e. for the 2025 FBT year), the ATO has introduced new flexibility around how employers can meet their documentation obligations — especially for benefits like travel, meals, and car-related claims.

In short: you can now use business records instead of traditional employee declarations, in certain cases.

What’s changing?

Historically, the FBT regime has required formal declarations from employees — travel diaries, logbooks, no-private-use statements, and the like — to reduce FBT liability or support exemption claims.

From the 2025 FBT year, employers can now rely on existing corporate records (e.g. payroll systems, booking tools, vehicle logs, accounting records) as an alternative, provided the records meet certain standards.

This shift is backed by legislative instruments issued by the ATO, which outline the benefits eligible for alternative record-keeping and what counts as an acceptable record.

Why it matters

This is a practical win for employers and advisers alike. The ATO has recognised that:

Many businesses already maintain robust systems that contain relevant information.
Traditional declarations create duplication and administrative overhead, often without improving compliance.
FBT compliance is more achievable when the system meets businesses where they are.

This change could significantly reduce the paperwork burden for eligible benefits, and give tax agents more latitude in advising clients with modern record-keeping systems.

What practitioners need to do now

The new rules don’t mean “no records” — they mean alternative records, and the bar is still high.

Advisers should:

Identify which clients provide fringe benefits eligible for alternative record keeping (e.g. travel-related, car benefits, relocation expenses).

Review current internal systems to determine whether existing business records meet the new standards.

Educate clients on what constitutes “adequate” business records — vague spreadsheets or incomplete logs won’t cut it.

Consider integrating FBT compliance reviews into broader year-end checklists or payroll health checks.

The new rules don’t mean “no records” — they mean alternative records, and the bar is still high.

Advisers should:

Where to find the rules

The ATO has issued legislative instruments and explanatory statements setting out the framework. These cover:

The types of benefits eligible
What constitutes a “business record”
What information must be retained
How long records must be kept

All of this is accessible via theATO’s FBT 2025 update hub.

Looking Ahead: Compliance Made Simpler, Not Optional

This is a meaningful compliance reform — not just a technical tweak. For employers running modern systems, the ability to rely on existing data sources to support FBT reporting will save time, reduce risk, and cut through some of the red tape.

The key is knowing when alternative records are enough, and ensuring that documentation still aligns with the intent of the FBT law.