Fringe benefits tax (FBT) is a tax paid by employers on certain non-salary benefits given to employees or their families. FBT is separate from income tax and is calculated based on the taxable value of the fringe benefit. Employers must self-assess their FBT liability annually and file a return if owed. Fringe benefits are forms of compensation besides regular wages, like allowing private use of a company car, discounted loans, or gym memberships. FBT applies to benefits for employees, families, and associates but not contractors. The employer pays the FBT even if a third party arranged the benefit. FBT is 47% of the grossed-up value, which is what the employee would have to earn pre-tax to buy the benefit themselves. Employers can claim income tax deductions for fringe benefit costs and FBT paid.