This alert aims to provide some guidance on which work-from-home style benefits are FBT-exempt in 2026, focusing on the exemption available for certain work-related items, and the treatment of home internet and office equipment.
The table below is designed to provide an snapshot of the FBT treatment of common benefits as a quick reference for Tax, HR, IT, finance teams, and payroll managers.
FBT Exempt / Not-Exempt Work Related Items (2026)
| Benefit Type | FBT Exempt? | Key Conditions / Notes |
|---|---|---|
| Laptop / Tablet | Yes | Exempt if provided predominantly for work purposes. One similar item per employee per FBT year (unless a replacement). Note: Small businesses (turnover < $50m) can provide more than one similar device per year. |
| Mobile Phone | Yes | Exempt if provided predominantly for work purposes. One similar item per employee per FBT year (unless a replacement). |
| Portable Printer / GPS | Yes | Exempt if provided predominantly for work purposes. One item per employee per FBT year (unless a replacement). |
| Computer Software | Yes | Exempt if provided predominantly for work purposes. One item per employee per FBT year (unless a replacement). |
| Protective Clothing | Yes | Exempt if provided predominantly for work purposes. |
| Briefcase / Tools of Trade | Yes | Exempt if provided predominantly for work purposes. One item per employee per FBT year (unless a replacement). |
| Home Internet | No* | Generally not exempt unless the cost is directly related to work and the otherwise deductible rule applies. Partial exemption may apply if a log is kept and declaration is signed. |
| Office Furniture (e.g. desk, chair) | No | Generally, not exempt. FBT applies unless the otherwise deductible rule can apply in limited scenarios. |
| Second Laptop / Device (Non-small business employer) | No | Only the first device with a substantially identical function is exempt per FBT year (unless a replacement) if provided predominantly for work purposes. |
| Second Laptop / Device (Small business employer) | Yes | Small businesses can provide multiple similar devices per year, all exempt if provided predominantly for work purposes. |
*Home internet may be partially exempt if the employer can demonstrate the work-related portion and applies the otherwise deductible rule.
Key Rules Explained for Work-From-Home and FBT
Work-Related Items Exemption:
- Applies to portable electronic devices, software, protective clothing, briefcases, and tools of trade.
- The item must be provided predominantly for work purposes.
- Limit of one item to be treated as exempt per employee per FBT year for items with substantially identical functions (unless a replacement is needed) if provided predominantly for work purposes.
- Small businesses (aggregated turnover < $50 million) can provide multiple similar devices per year, all exempt if provided predominantly for work purposes.
One-Item-Per-Year Rule:
- For most employers, only one item with similar or identical function per category (e.g. one laptop, one phone) can be treated as exempt per employee per FBT year.
- If a second similar item is provided, FBT applies unless it is a replacement for a lost or broken item.
- Small businesses are exempt from this restriction.
Home Internet and Office Equipment:
- Home internet is generally not FBT exempt unless the work-related portion can be substantiated (e.g. via declaration), and the otherwise deductible rule can then apply.
- Office furniture and equipment provided for home use are generally not FBT exempt unless the otherwise deductible rule applies (e.g. if the employee would have been entitled to a deduction if they had incurred the cost themselves). Specific scenarios require detailed review in line with ATO guidance.
What This Means for You
- Review your current policies with respect to the provision of laptops, phones, and other work-related items to ensure it is fit for purpose and the current usage patterns of employees, as well as ensuring it is in compliance with the one-item-per-year exemption requirements.
- Small businesses have greater flexibility and can provide multiple similar devices FBT-free. If you meet the small business criteria, consider if you are maximising what you are offering to employees.
- Keep clear records demonstrating work-related use for all exempt items.
- For home internet and office equipment, maintain logs, declarations and other necessary evidence to support any work-related otherwise deductible claims.
Next Steps / Andersen Perspective
With hybrid work arrangements now standard, it’s essential to understand the FBT implications of providing work-from-home benefits. Andersen Australia can help you review your benefit policies, ensure compliance, and minimise FBT exposure going forward.
Key Reference Links
FBT 2026 Hub
Stay up to date with all of our FBT insights, guides and practical resources in our FBT 2026 hub:
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