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Income Tax Act 2007

Income - Excluded income - Exclusions and limitations

CX 21: Business tools

You could also call this:

“Work tools under $5,000 can be used personally without being a taxable benefit”

If your employer gives you a tool for work, you can use it for personal reasons without it being considered a benefit. This applies if the tool is mainly for work use and costs your employer $5,000 or less. The cost includes any tax deductions your employer can claim.

Even if you don’t use the tool at your workplace, it can still be mainly for work if you do a lot of your job away from the office.

Remember, this rule only applies to tools that are mostly for work. If you’re not sure, it’s best to ask your employer or a tax expert.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513376.

Topics:
Money and consumer rights > Taxes
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“Tax-free benefits from employers to help you do your job”

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“Tax treatment of benefits given to non-executive directors by companies”

Part C Income
Excluded income: Exclusions and limitations

CX 21Business tools

  1. The private use of a business tool that an employer provides to an employee, and the availability for private use of such a business tool, is not a fringe benefit if—

  2. the business tool is provided mainly for business use; and
    1. the cost of the business tool to the employer, including the amount of any deduction for the cost of the business tool that the employer may make under section 20(3) of the Goods and Services Tax Act 1985, is no more than $5,000.

      1. For the purposes of subsection (1), a business tool that is not taken to and used on the employer’s premises may nevertheless be provided mainly for business use if the employee performs a significant part of the employee’s employment duties away from the premises.

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