NZ FBT calculator: motor vehicles and the alternate rate
Work out fringe benefit tax on a work vehicle in New Zealand: the taxable value under the cost price or tax book value method (including the new Investment Boost rates from 1 April 2026), for a quarterly or annual return, and the FBT at the 63.93% single rate or 49.25% alternate rate. Then run the full alternate rate calculation for an employee at year end. It matches Inland Revenue's worked examples in the IR409 guide.
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Vehicle FBTAlternate rateRatesWorked examplesFAQ
Full alternate rate calculation (quarter 4 or annual return)
For each employee with attributed benefits, IR409 works out the FBT from their cash income and total fringe benefits for the tax year, using the 2026-onwards thresholds.
Motor vehicle rates (IR409, from 1 April 2026)
| Method | Quarterly (incl / excl GST) | Income year or annual (incl / excl GST) |
|---|---|---|
| Cost price | 5% / 5.75% | 20% / 23% |
| Tax book value | 9% / 10.35% | 36% / 41.40% |
| Tax book value, Investment Boost claimed | 10.35% / 11.90% | 41.40% / 47.61% |
Minimum tax book value: $8,333, or $7,317 if Investment Boost was claimed. FBT rates: 63.93% single rate, 49.25% alternate rate. Inland Revenue has proposed a new category-based approach for motor vehicles for benefits provided from 1 April 2027. This calculator uses the current rules.
Worked examples (IR409)
- Cost price, quarterly: Michael's car costs $89,900. 90 × $89,900 ÷ 90 × 5% = $4,495, less $170 petrol he paid = $4,325.
- Tax book value, quarterly: 4 pooled cars valued at the highest $26,000 = $104,000 × 9% = $9,360.
- Cost price, income year: Mia's car costs $132,900 with 75 exempt days: 290 × $132,900 ÷ 365 × 20% = $21,118.
- Tax book value, income year: 290 × $85,056 ÷ 365 × 36% = $24,328.
- Full alternate rate (Zac): income $78,333.50, tax $15,727.39, net income $62,606.11, benefits $4,993.60, total remuneration $67,599.71. $18,186.05 − $15,727.00 = $2,459.05 FBT, less $1,832.88 assessed in quarters 1–3 = $626.17 to pay in quarter 4.
- Full alternate rate (Thomas, annual): income $70,000, benefits $8,000: $16,797.20 − $13,219.58 = $3,577.62.
- Income not known (Alice): $8,629.95 × 63.93% = $5,517.12.
FAQ
How do you calculate FBT on a car in NZ?
Taxable value = private use days × the vehicle’s cost price or tax book value ÷ 90 (quarterly) or 365 (annual) × the rate, less any employee contributions. With the cost price method the rate is 5% a quarter or 20% a year, GST inclusive. FBT is then the taxable value × 63.93% (single rate) or 49.25% (alternate rate).
What is the FBT rate in NZ for 2026-27?
The single rate is 63.93% of the taxable value. Quarterly filers can use the alternate rate of 49.25% in quarters 1 to 3, then must square up in quarter 4 using one of the alternate rate calculations based on each employee’s income.
What changed for FBT on 1 April 2026?
If Investment Boost was claimed on a vehicle, its tax book value uses higher rates: 10.35% (GST inclusive) or 11.90% (exclusive) a quarter, or 41.40% / 47.61% a year, with a minimum tax book value of $7,317. Employers can also choose to treat some reimbursements and gift cards as PAYE income instead of applying FBT.
Are the FBT motor vehicle rules changing in 2027?
Inland Revenue has proposed a category-based approach that would replace counting private use days, with new rates for standard, hybrid and electric vehicles, for benefits provided from 1 April 2027. This calculator uses the rules that apply now.
What is the full alternate rate calculation?
At year end, each employee’s cash income is reduced by income tax to net income, fringe benefits are added to get total remuneration, and FBT is the tax on total remuneration less the tax on net income, using the FBT rate table (11.73% to 63.93%).
Sources (checked 17 Oct 2026): Inland Revenue Fringe benefit tax guide IR409 (2026); Inland Revenue Ways to value motor vehicles for FBT; Inland Revenue FBT changes now in effect (30 March 2026).
General information, not tax advice. Work-related vehicles, exempt days and pooling rules can change the result. GST on fringe benefits isn't calculated here. Check the IR409 guide or Inland Revenue.