FBT Exemption - Headphones

 Author: JayATO(Community Support)Community Support

26 Nov 2025

Hi @LyonLim

Your company will likely need to pay fringe benefits tax (FBT) if you salary sacrifice headphones through a formal arrangement. When an employer provides benefits to employees beyond their salary, this generally creates an FBT liability.

However, there are some ways to reduce or eliminate the FBT:

• The 'otherwise deductible rule' may apply if you could claim the headphones as a work-related deduction on your personal tax return
• The minor benefits exemption might apply if the headphones cost under $300 and are provided infrequently and irregularly
• Work-related items may be exempt from FBT in certain circumstances

The key factor is whether the headphones are genuinely required for your work duties and whether you'd be able to claim them as a tax deduction if you purchased them yourself.

You should check the specific FBT exemptions and concessions available and consider whether the otherwise deductible rule applies to your situation to determine the actual FBT liability.

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