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Income Tax Act 2007

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

RD 42: Goods at staff discount

You could also call this:

“Rules for goods sold to employees at a discount”

When your employer sells goods to you as part of their normal business, this law applies in certain situations. It applies when the same goods would normally sell for $200 or less to anyone else in New Zealand. Your employer must be selling the goods to you for less than what they paid for them, giving you a staff discount. This discount can’t be more than 5% off the normal price.

If all these things are true, the law says that the goods are treated as if your employer sold them to you for the same price they paid for them. This means your employer isn’t making any profit when they sell the goods to you with the staff discount.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1520060.

Topics:
Money and consumer rights > Taxes
Work and jobs > Worker rights
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“Rules for valuing services given as fringe benefits by employers”

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RD 43: Goods on special with staff discount, or

“Rules for staff discounts on goods already on sale to the public”

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

RD 42Goods at staff discount

  1. This section applies when an employer disposes of goods in the normal course of their business to an employee when all the following apply:

  2. the retail price of identical goods is $200 or less to an arm’s length buyer in the open market in New Zealand in a sale freely offered and made on ordinary trade terms; and
    1. the price of the goods to the employee is lower than their cost to the employer, the difference resulting from a staff discount that the employer normally provides to employees; and
      1. at the time of the disposal, the staff discount is no more than 5% of the price of identical goods in the circumstances referred to in paragraph (a).

        1. The goods are treated as having been sold at a price equal to the cost of the goods to the employer.

        Compare
        Notes
        • Section RD 42(1): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
        • Section RD 42(1)(c): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).