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Income Tax Act 2007

General collection rules - Employment-related taxes - Value of fringe benefits

RD 38: Contributions to funds, trusts, and insurance premiums

You could also call this:

“Employer payments for employee benefits and insurance”

When your employer contributes to certain funds or pays for insurance for you, it’s considered a benefit. Here’s how the value of these benefits is determined:

If your employer contributes to a fund that helps you when you’re sick, have an accident, or in case of death, the value of this benefit is the same as the amount your employer puts into the fund.

The same goes for funeral trusts. If your employer contributes to a funeral trust for you, the value of this benefit is exactly how much they put in.

Your employer might also pay for life or health insurance for you. In this case, the value of the benefit is the amount of the insurance premium that your employer pays.

Lastly, if your employer contributes to an insurance fund of a friendly society for you, the value of this benefit is the amount they contribute to the fund.

Remember, in all these cases, the value of the benefit is simply the amount your employer pays or contributes.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1520039.

Topics:
Money and consumer rights > Taxes
Money and consumer rights > Savings and retirement
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“How employer contributions to your superannuation scheme are valued”

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“Tax rules for benefits from charitable organisations”

Part R General collection rules
Employment-related taxes: Value of fringe benefits

RD 38Contributions to funds, trusts, and insurance premiums

  1. The value of the benefit that an employer provides in contributing to a sickness, accident, or death benefit fund for an employee is the amount of the contribution made by the employer.

  2. The value of the benefit that an employer provides in contributing to a funeral trust for an employee is the amount of the contribution made by the employer.

  3. The value of the benefit that an employer provides in paying an insurance premium described in section CX 16 (Contributions to life or health insurance) for an employee is the amount of the premium paid by the employer.

  4. The value of the benefit that an employer provides in contributing to an insurance fund of a friendly society for an employee is the amount of the contribution made by the employer.

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