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Income Tax Act 2007

Income - Excluded income - Exclusions and limitations

CX 19: Benefits provided instead of allowances

You could also call this:

“Employer-provided benefits that replace certain tax-free allowances”

When your employer gives you something instead of paying you an allowance, it’s not considered a fringe benefit in certain situations. This applies if what they give you removes the need for them to pay you an allowance that would have been:

  1. Exempt from income tax and not meant for you to give to someone else.

  2. To cover your travel costs between home and work that are for your job and benefit your employer. These travel costs must be related to specific factors set out in another part of the law.

  3. Exempt from income tax under rules about employers paying for your accommodation, work-related meals, moving expenses, or clothing.

If your employer gives you something instead of the travel allowance mentioned above, it’s not a fringe benefit if:

  • It’s because you’ve temporarily changed where you work but still have the same job.
  • It pays back travel costs for your spouse, partner, or relatives to visit you at your temporary workplace.
  • It’s not worth more than the travel allowance would have been.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513372.

Topics:
Money and consumer rights > Taxes
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CX 18: Benefits provided to associates of both employees and shareholders, or

“Tax rules for benefits given to people connected to both employees and company owners”

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CX 19B: Transport in vehicle other than motor vehicle, or

“Transport in non-passenger vehicles without motors isn't a fringe benefit”

Part C Income
Excluded income: Exclusions and limitations

CX 19Benefits provided instead of allowances

  1. A benefit that an employer provides to an employee in connection with their employment is not a fringe benefit to the extent to which it removes the need that would otherwise exist for the employer to pay the employee an allowance of 1 of the following kinds:

  2. an allowance that, if it had been paid,—
    1. would have been exempt income under section CW 17 (Expenditure on account, and reimbursement, of employees); and
      1. would have been paid for reasons other than to enable the employee to provide a benefit to another person; or
      2. an allowance that reimburses the employee for transport costs that—
        1. would have been incurred both in connection with their employment and for the benefit of the employer in travelling between home and work; and
          1. would have been attributable to any 1 or more of the factors set out in section CW 18(3) (Allowance for additional transport costs); or
          2. an amount that, if it had been paid, would have been exempt income under sections CW 16B to CW 16F, CW 17B, CW 17CB, and CW 17CC (which relate to certain expenditure of an employer on an employee's accommodation, work-related meals, relocation, and clothing).

            1. A benefit that an employer provides to an employee is not a fringe benefit if it—

            2. is in substitution for an allowance described in subsection (1)(b); and
              1. is brought about because the employee has a temporary change in their place of work while in the same employment; and
                1. reimburses the employee for transport costs that would have been incurred relating to travel by 1 or more of the employee’s spouse, civil union partner, or de facto partner, and relatives for the purpose of visiting the employee in the temporary place of work; and
                  1. has a value that is no more than the amount that would be provided under the allowance described in subsection (1)(b).

                    Compare
                    Notes
                    • Section CX 19(1)(b)(ii): amended (with effect on 1 April 2008), on , by section 53 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                    • Section CX 19(1)(c): added (with effect on 1 April 2008), on , by section 53 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                    • Section CX 19(1)(c): amended, on , by section 35 of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).