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Income Tax Act 2007

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

RD 43: Goods on special with staff discount

You could also call this:

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

When your employer sells you goods that they’re also selling to everyone else at a special price, there are some rules about how much they can discount the price for you. These rules apply when the goods usually cost $200 or less when sold to regular customers.

Your employer can give you an extra discount on top of the special price, but they can’t sell the goods to you for less than what it cost them to buy the goods. The price you pay must be at least 95% of what it cost your employer to buy the goods, or 95% of the special price they’re selling it to everyone else for - whichever is lower.

For these rules to apply, there needs to be enough of the same goods available for anyone else to buy at the same time. If all these conditions are met, then for tax purposes, it’s treated as if your employer sold you the goods at the price it cost them to buy them.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1520062.

Topics:
Money and consumer rights > Taxes
Work and jobs > Worker rights
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Part R General collection rules
Employment-related taxes: Value of fringe benefits

RD 43Goods on special with staff discount

  1. This section applies when an employer disposes of goods to an employee on a day when the employer is offering identical goods for sale or other disposal in the normal course of their business at a special price and when all the following apply:

  2. the price of the 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 offers to the employee in addition to any other discount; and
      1. just before or after the disposal to the employee, a reasonable quantity of the identical goods is available in the open market in New Zealand; and
        1. the price is at least 95% of the cost of the goods to the employer, or at least 95% of the price on the day of the disposal of the identical goods to the public in the open market in New Zealand, whichever is less.

          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 43(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 43(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).
          • Section RD 43(1)(d): 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).