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Income Tax Act 2007

Income - Exempt income

CW 18: Allowance for additional transport costs

You could also call this:

“Extra money from your employer for work-related travel costs”

If you’re an employee, you might get money from your employer to help with extra travel costs. This money is not taxed if you spend it on travel for work that benefits your employer.

Your employer can guess how much money you or a group of workers might need for travel. They can treat this guess as the real amount for a certain time period.

Extra travel costs are when you have to spend more money than usual to get to and from work. This could happen because:

You work at unusual times You need to carry work things with you You have to do something the law says you must do Your workplace has changed for a short time Something else about your job makes travel more expensive There’s no good public transport to your workplace

To work out your extra travel costs:

If it’s because of one of the first five reasons, you count how much more you spend than usual If it’s because of no good public transport, you count how much more than $5 you spend each day you go to work Usually, you don’t count travel costs for trips over 70 kilometres in one day

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513185.

Topics:
Money and consumer rights > Taxes
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Part C Income
Exempt income

CW 18Allowance for additional transport costs

  1. An allowance that an employee receives from an employer to reimburse the employee’s additional transport costs is exempt income to the extent to which the employee incurs the costs in connection with their employment and for the employer’s benefit or convenience.

  2. For the purposes of subsection (1),—

  3. the employer may make, for a relevant period, a reasonable estimate of the amount of expenditure likely to be incurred by the employee or a group of employees for which reimbursement is payable; and
    1. the amount estimated is treated as if it were the amount incurred during the period to which the estimate relates.

      1. In this section, additional transport costs means the costs to an employee of travelling between their home and place of work that are more than would ordinarily be expected. The costs must be attributable to 1 or more of the following factors:

      2. the day or time of day when the work duties are performed:
        1. the need to transport any goods or material for use or disposal in the course of the employee’s work:
          1. the requirement to fulfil a statutory obligation:
            1. a temporary change in the employee’s place of work while in the same employment:
              1. any other condition of the employee’s work:
                1. the absence of an adequate public passenger transport service that operates fixed routes and a regular timetable for the employee’s place of work.

                  1. Additional transport costs are quantified as follows:

                  2. when the additional transport costs are attributed to a factor described in any of subsection (3)(a) to (e), the amount by which the costs are more than the employee’s ordinarily expected travel costs without reference to that factor:
                    1. when the additional transport costs are attributed to the factor described in subsection (3)(f), the amount by which the costs are more than $5 for each day on which the employee attends work:
                      1. except in special circumstances, the costs of travelling any distance over 70 kilometres in 1 day are not taken into account in calculating additional transport costs.

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