Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

General collection rules - Employment-related taxes - Introductory provisions

RD 26: Liability for FBT

You could also call this:

“Employer's responsibility to pay tax on employee benefits”

If you’re an employer and you give your employee a fringe benefit, you have to pay something called Fringe Benefit Tax (FBT). You can choose how you want to pay this tax.

You have four different ways to pay FBT:

  1. You can use the single rate option. You can learn more about this in section RD 58.

  2. You can use the alternate rate option. You can find out about this in section RD 59.

  3. If you’re eligible, you can use the close company option. This is explained in section RD 60.

  4. If you’re eligible, you can use the small business option. You can read about this in section RD 61.

If you want to choose either the single rate option or the alternate rate option, you can do this by sending in a tax return that shows which rate you’ve picked.

You can find more details about how FBT works in sections RD 27 to RD 57.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1520000.

Topics:
Money and consumer rights > Taxes
Previous

RD 25: FBT rules and their application, or

“Rules for taxing extra benefits employers give to workers”

Next

RD 27: Determining fringe benefit values, or

“How to work out the value of extra job benefits”

Part R General collection rules
Employment-related taxes: Introductory provisions

RD 26Liability for FBT

  1. An employer who provides a fringe benefit to an employee is liable to pay FBT under sections RD 27 to RD 57, choosing a method of payment described in subsection (2).

  2. An employer must choose 1 of the following options for the payment of FBT:

  3. the single rate option, see section RD 58; or
    1. the alternate rate option, see section RD 59; or
      1. if eligible, the close company option, see section RD 60; or
        1. if eligible, the small business option, see section RD 61.

          1. An employer may make an election under subsection (2)(a) or (b) by providing a return setting out the rate chosen.

          Compare