Single 63.93% Vs Alternate 49.25% And Q4
Single 63.93% vs alternate 49.25% and Q4 is an Inland Revenue filing choice, not two different taxes. The single rate of 63.93% can be used in quarterly, income year, and annual returns. If you file quarterly, you can use it for all 4 quarters. No other calculations are required if the single rate is used in all 4 quarters. The alternate rate of 49.25% can be used in quarterly returns, but only in quarters 1 to 3.
Inland Revenue’s common FBT mistakes page names the same two rates, and says that if you use 49.25% in any of the first 3 quarters you need an alternate rate calculation in quarter 4 (ending 31 March). Quarter 4 is 1 January to 31 March. The return and payment are due 31 May. This page is the rate election map. A single quarter dollar split still sits on the calculator.
Single rate 63.93%
Inland Revenue: FBT is calculated using 63.93% on all benefits you provide to employees, regardless of how much they will earn for the tax or income year. Allowed in quarterly, income year, and annual returns. Allowed in all 4 quarters. Stay here all year and you do not owe a quarter 4 alternate worksheet.
Alternate rate 49.25%
Inland Revenue: only in quarters 1 to 3. You may want this if the total of your employee’s income and fringe benefits is less than $180,000 for the tax year. You must use 63.93% if you are not using the alternate rate. Use 49.25% in any of those quarters and quarter 4 must be one of the three alternate calculation options.
What must quarter 4 do?
It depends on what you filed in quarters 1 to 3. Inland Revenue’s calculation options and rates page splits it in two. If you used 49.25% in any of the first 3 quarters, you must use full alternate, short form alternate, or pooled alternate in quarter 4. If you used 63.93% in quarters 1 to 3 for employees earning less than $180,000, you may want one of those three options in quarter 4 because FBT may be overpaid if 63.93% ran all year.
| What you filed in quarters 1 to 3 | What quarter 4 must or may do |
|---|---|
| 63.93% in every quarter 1 to 3, and you stay on 63.93% | No other calculations required if the single rate is used in all 4 quarters. |
| 63.93% in quarters 1 to 3, staff under $180,000 | You may complete quarter 4 using 1 of the 3 alternate rate calculation options. |
| 49.25% in any of quarters 1 to 3 | You must use 1 of the 3 alternate rate calculation options in quarter 4. |
| All 4 quarters already filed on 63.93% | You can apply to change quarter 4 to an alternate rate calculation within 2 months of your quarter 4 assessment. |
Sources: Inland Revenue calculation options and rates, common FBT mistakes, full alternate rate calculations, filing frequency, Fringe benefit tax guide IR409 2026.
You cannot unwind 49.25% after you file
Inland Revenue: if you decide to use the alternate rate option in a quarter, you cannot go back and change the option to the single rate after the return has been filed. Pick 49.25% knowing quarter 4 will be a worksheet quarter.
What are the three quarter 4 options?
Full alternate, short form alternate, and pooled alternate. Inland Revenue’s full alternate rate calculations page: these also apply to income year returns, annual returns, and a final quarterly return if you have stopped employing staff and no longer providing fringe benefits. If you file in myIR with the worksheet option, the calculations are done for you. Paper sheets are IR417 (quarterly), IR418 (income year), and IR419 (annual). IR409 Part 7 walks through the worksheets.
Full alternate
Separate calculations for each employee receiving attributed benefits, based on total remuneration for the year (net income plus total fringe benefits). For quarterly returns, FBT to pay in quarter 4 is FBT payable for the year, less FBT assessed from quarters 1 to 3.
Short form alternate
Apply 63.93% to all attributed benefits for all employees regardless of how much they earn or receive in attributed benefits. Non attributed benefits are treated the same as the full alternate rate pools.
Pooled alternate
Attributed benefits get 49.25% or 63.93% by earnings and benefit value. For the 2026 year, 49.25% pool: income of $160,000 or less and attributed benefits $13,400 or less a year, or total remuneration less than $130,724. Everyone else is 63.93%.
Inland Revenue quarter 4 arithmetic
FBT payable for the year minus FBT assessed from quarters 1 to 3 equals FBT to pay in quarter 4. That line is on the full alternate rate page and on IR417. Do not treat 49.25% as the quarter 4 rate if you already used it earlier in the year.
Non attributed pools under full alternate use 63.93% for benefits provided to major shareholder employees and 49.25% for all other employees. If a major shareholder is one of the recipients of non attributed benefits that cannot be assigned, all benefits in that type are taxed at 63.93%. You must attribute motor vehicles and low interest loans when you use full or pooled alternate, with no annual attribution threshold on those two types. Other benefit types have annual thresholds on Inland Revenue’s attributing page, including unclassified benefits and gift cards at $2,000.
If you do not have all the employee’s income details at quarter 4, Inland Revenue lets shareholder employees and employees who receive attributed income from a company or trust that is their employer use 49.25% or 63.93% on the year’s attributed benefits. If you use 49.25%, you must complete a remuneration adjustment in next year’s quarter 4 or annual return. If you use 63.93%, you do not. Work a single quarter taxable value on the FBT calculator. Who files IR420, and the 31 May clock, sit on FBT for employers.
Inland Revenue: you must use the single rate of 63.93% if you are not using the alternate rate. Filing frequency is separate. All employers can file quarterly. Income year and annual returns still choose single rate or one of the three alternate calculation options, not a fourth quarterly 49.25%.
Use case: Hamilton cafe, staff under $180,000
Situation: labelled Hamilton Ltd. Quarterly FBT. Most staff well under $180,000 of income plus benefits. Bookkeeper likes 49.25% in quarter 1.
Action: that filing locks an alternate calculation into quarter 4. Budget time in May for full, short form, or pooled. Do not expect another 49.25% box on the 1 January to 31 March return.
Use case: Auckland partnership, all over $180,000
Situation: labelled Auckland professional firm. Every person receiving perks sits over Inland Revenue’s $180,000 hint line.
Action: 63.93% all 4 quarters is the path Inland Revenue says needs no extra calculation. The calculator can still price one quarter’s taxable value. Skip 49.25% if you do not want a quarter 4 worksheet.
Use case: Tauranga already filed 49.25% in quarter 2
Situation: labelled Tauranga employer. Quarter 2 IR420 used 49.25%. Quarter 3 is still open.
Action: you cannot change quarter 2 back to 63.93% after filing. Quarter 4 must be one of the three alternate options. myIR worksheet option can run the year wash up. Keep IR417 or the myIR working papers with the return.
What people get stuck on
r/PersonalFinanceNZ threads treat 63.93% as the only FBT rate and then gross up health insurance as if every staff member sat in the top band. Inland Revenue still offers 49.25% in quarters 1 to 3 and the three quarter 4 options. r/nzbusiness asks how gym membership FBT is calculated and gets pointed at IR409. Rate choice is this page. Unclassified limits are a different clock. Forum maths that FBT is 49% of a car lease instalment is not IR409.
A 2022 Accounting Hub note that talks about short form 63.93% or 49.25% in quarters 1 to 3 does not match the live calculation options page. Employment Hero’s “four rate types” mix also blurs short form into the year. Inland Revenue: 49.25% is quarters 1 to 3 only. Short form is a quarter 4, income year, or annual option that puts 63.93% on attributed benefits. Medium and Quora hits this run were Australian BAS and EV novated FBT. Drop those. Taxathand and Wolters Kluwer pages were blocked this run. Leech’s wash up in quarter 4 matches Inland Revenue.