RFBA: What Is the Reportable Fringe Benefits Amount and How Does It Affect You?

If you salary package — whether you work for a hospital, charity, NFP, or state government — you may notice a figure on your income statement labelled RFBA or "reportable fringe benefits amount." It's not income. You won't pay income tax on it. But it can still cost you money.

This article explains exactly what the RFBA is, why it appears on your income statement, and which government payments, thresholds, and obligations it affects.

What Is the RFBA?

The Reportable Fringe Benefits Amount (RFBA) is a figure that appears on your income statement (formerly called a payment summary) when your employer provides you with fringe benefits — non-cash benefits provided through a salary packaging arrangement — whose total taxable value exceeds $2,000 in an FBT year.

It is not income you receive. It is not taxed in your hands as ordinary income. But the ATO uses it to calculate your adjusted taxable income (ATI), which is a wider measure of your financial position used for means testing a range of government benefits, obligations, and thresholds.

The grossed-up figure

The RFBA is shown at its grossed-up value, not its actual dollar value. The ATO grosses up the actual value of your fringe benefits because fringe benefits are paid from pre-tax income — grossing up converts the benefit to a before-tax equivalent that is comparable to cash salary.

The grossing-up factor for FBT year 2025-26 is 1.8868 (the Type 2 rate applicable to most salary packaging benefits).

Example: You salary package $9,010 in living expenses as a hospital employee. Your RFBA on your income statement is approximately $17,000 (being $9,010 × 1.8868). You did not receive $17,000. But the ATO treats your adjusted taxable income as if you did.

Exempt Reportable Fringe Benefits Amount

Some fringe benefits are exempt from FBT entirely — and these are handled differently on your income statement.

If you salary sacrifice into super, this is a concessional contribution — it appears on your income statement but is not reported as RFBA. Super salary sacrifice does not increase your adjusted taxable income.

However, other benefits that are FBT-exempt (such as work-related devices) can still generate an Exempt Reportable Fringe Benefits Amount (ERFBA). The ERFBA is reported on your income statement and does count toward your adjusted taxable income for most purposes — even though the employer paid no FBT on the benefit.

This distinction catches many people out:

Benefit	FBT paid?	Reported on income statement?	Increases adjusted taxable income?
Living expenses (hospital/NFP cap)	No (FBT-exempt)	Yes, as RFBA	Yes
Meal entertainment (hospital/NFP cap)	No (FBT-exempt)	Yes, as RFBA	Yes
Novated lease	Yes (employer pays FBT)	Yes, as RFBA	Yes
Super salary sacrifice (concessional)	No	No	No
EV novated lease (FBT-exempt)	No	Yes, as ERFBA	Yes (for most purposes)
Work-related devices (one phone, one laptop)	No (FBT-exempt)	Yes, as ERFBA	Yes (for most purposes)

What Does the RFBA Actually Affect?

The RFBA increases your adjusted taxable income (ATI) — and ATI is used for a surprisingly wide range of calculations. Here's what it affects:

1. HECS/HELP Repayments

Your compulsory HECS/HELP repayment is calculated on your repayment income, which includes your RFBA. If salary packaging pushes your repayment income above the minimum repayment threshold ($69,528 for 2026-27), you'll have HECS repayments withheld even though the RFBA is not cash in your pocket.

Example: A WA Health nurse earns $75,000 salary and packages $9,010 in living expenses. Her RFBA is approximately $17,000. Her repayment income is $75,000 + $17,000 = $92,000 — well above the threshold and in a higher repayment percentage bracket. She pays more HECS than a colleague on the same cash salary who does not package.

If you have a HECS/HELP debt and salary package, you need to factor this into your salary sacrifice calculation to ensure you're still ahead after the higher HECS repayment.

Use the HECS Repayment Calculator to model your repayment income including RFBA.

2. Medicare Levy Surcharge

The Medicare Levy Surcharge (MLS) applies if your income exceeds $93,000 (singles) or $186,000 (families) and you don't have private hospital cover. Your ATI — including RFBA — is used to test against the MLS threshold.

If your cash salary is below the MLS threshold but your RFBA pushes ATI above it, you may be liable for the MLS (1–1.5% of ATI) unless you hold eligible private hospital insurance.

3. Private Health Insurance Rebate

The government rebate on private health insurance reduces as income rises. ATI (including RFBA) determines which tier of rebate you receive. If RFBA pushes you into a higher ATI tier, your rebate percentage decreases.

4. Child Care Subsidy

The Child Care Subsidy (CCS) rate is means-tested on combined family ATI. RFBA is included in ATI. High RFBA can reduce the CCS rate or phase it out entirely for families near the income thresholds.

5. Centrelink and Government Payments

Many Centrelink payments (Family Tax Benefit, Parenting Payment, Youth Allowance parental income test) are means-tested on ATI. RFBA is included. If you or a dependent receive Centrelink payments, model the ATI impact of salary packaging carefully before proceeding.

6. Superannuation Co-Contribution and Low-Income Super Tax Offset

Government super incentives (co-contributions and LISTO) are income-tested on ATI. RFBA inclusion can push ATI above eligibility thresholds, reducing or eliminating these benefits.

7. Spouse Super Contribution Tax Offset

This offset phases out at ATI above $37,000 and cuts off at $40,000. If RFBA pushes ATI above $40,000, the offset is lost.

Does the RFBA Affect My Income Tax?

No — the RFBA itself does not generate an income tax liability. You do not pay income tax at your marginal rate on the RFBA figure. The employer has already paid FBT on the benefit (or the benefit is FBT-exempt).

What the RFBA does is affect income thresholds and means tests that use ATI — but the RFBA dollars themselves are never taxed as ordinary income in your hands.

How Is the RFBA Calculated?

Your employer calculates and reports the RFBA at the end of each FBT year (31 March). It appears on your income statement for the corresponding income year.

The formula:

RFBA = Taxable value of reportable fringe benefits × grossing-up factor

For most salary packaging benefits (Type 2 rate): grossing-up factor = 1.8868

Actual benefit value	RFBA reported
$2,000	$3,773
$5,000	$9,434
$9,010 (hospital cap)	$17,003
$15,900 (NFP cap)	$30,000

Only benefits with a taxable value above $2,000 are reported. Benefits below this threshold do not create an RFBA.

Who Gets an RFBA?

You will have an RFBA on your income statement if:

You work for an employer who provides fringe benefits
The total taxable value of those benefits exceeds $2,000 in the FBT year (1 April to 31 March)
The benefits are not super contributions (which are handled differently)

Most employees who salary package living expenses, novated leases, or meal entertainment through their employer will have an RFBA.

Salary Packaging and RFBA: The Net Benefit Calculation

Before entering a salary packaging arrangement, calculate whether the tax saving from packaging exceeds the costs created by the higher RFBA:

Tax saving from packaging: Your marginal rate × amount packaged (e.g. 34.5% × $9,010 = $3,108 saving)

RFBA costs to check:

Extra HECS repayment (if applicable): calculate repayment at new ATI vs current ATI
MLS (if ATI pushes you above threshold and you lack private cover)
Reduced government payments or rebates (childcare, FTB, private health rebate)

For most hospital and NFP employees, the tax saving from living expenses packaging substantially exceeds the RFBA-related costs. But this is not universal — employees with large HECS debts near key thresholds, or families near Centrelink income limits, should model the full picture.

A financial adviser or your salary packaging provider can run this calculation for your specific situation.

Is the RFBA the Same as the ERFBA?

No — though they work similarly:

RFBA (Reportable Fringe Benefits Amount): Applies to benefits where the employer does pay FBT (e.g. novated lease on a standard car). The grossed-up amount is reported.
ERFBA (Exempt Reportable Fringe Benefits Amount): Applies to benefits that are FBT-exempt (e.g. the living expenses cap for hospital/NFP employees, work-related devices, EV novated leases). The same grossing-up applies, and it similarly increases ATI for most income tests.

In practice, for most income tests (HECS, MLS, Centrelink, private health rebate), both RFBA and ERFBA have the same effect on your ATI. The distinction matters for some specific calculations — your salary packaging provider or accountant can clarify which applies to your arrangement.

Frequently Asked Questions

What is RFBA on my income statement?

RFBA stands for Reportable Fringe Benefits Amount. It is a grossed-up dollar figure representing the value of non-cash benefits your employer provided through a salary packaging arrangement. It appears on your income statement (formerly payment summary) and increases your adjusted taxable income (ATI) for means-testing purposes — but it is not taxed as ordinary income.

Is RFBA the same as income?

No. You never receive the RFBA as cash. You do not pay income tax on it at your marginal rate. The employer has paid (or is exempt from) FBT on the underlying benefit. However, the RFBA increases your adjusted taxable income, which affects HECS repayments, Medicare Levy Surcharge thresholds, the private health insurance rebate, childcare subsidy, and Centrelink payments.

Does RFBA affect HECS repayments?

Yes — your HECS/HELP compulsory repayment is based on your repayment income, which includes your RFBA. If salary packaging creates an RFBA that pushes your repayment income above the threshold ($69,528 for 2026-27), or into a higher repayment percentage bracket, your HECS repayments increase. Model this carefully if you carry a large HECS debt.

What is the exempt reportable fringe benefits amount?

The Exempt Reportable Fringe Benefits Amount (ERFBA) applies to benefits that are FBT-exempt — such as the living expenses cap for hospital and NFP employees, EV novated leases, and work-related electronic devices. Like the RFBA, the ERFBA is reported on your income statement and included in your ATI for most income tests, even though neither you nor your employer paid FBT on the benefit.

Does super salary sacrifice create an RFBA?

No. Super salary sacrifice (concessional contributions) is not a fringe benefit — it is reported differently on your income statement as a reportable employer super contribution (RESC). Super salary sacrifice does not create an RFBA. This is one reason super salary sacrifice is often preferable to other forms of packaging for employees near income-tested thresholds.

How do I avoid or reduce my RFBA?

You cannot remove a legitimately reported RFBA — it reflects actual benefits provided to you. You can reduce it by reducing the value of packaged benefits, or by shifting from RFBA-generating benefits (living expenses, novated lease) to super salary sacrifice (which does not generate RFBA). If the RFBA is affecting a specific income test (Centrelink, HECS), speak with your packaging provider or a financial adviser about restructuring your packaging.

This article is for general information only and does not constitute financial, tax, or legal advice. Individual circumstances vary. Consult a registered tax agent or licensed financial adviser before making decisions based on this information.