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Income Tax Act 2007

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

RD 45: Unclassified benefits

You could also call this:

"Tax on benefits that don't fit into other categories"

Illustration for Income Tax Act 2007

You pay Fringe Benefit Tax (FBT) on unclassified benefits if they are over a certain amount. If you pay FBT quarterly, you pay tax on unclassified benefits if they are over $300 in a quarter. You also pay tax if the total value of some unclassified benefits is over $22,500 in four quarters. You can pay FBT annually or on an income year basis. If you do, you pay tax on unclassified benefits if they are over $1,200 in a year. You also pay tax if the total value of some unclassified benefits is over $22,500 in a year. There are rules about which benefits are included in these totals. These rules are about who provides the benefits and to whom. You can find more information about these rules in subsection (4). If your income year is not the normal 12 months, the tax rules are a bit different. You can read about this in subsection (5) and section RD 60. The rules are also different if you start or stop business during the year, or if you choose a different end date for your income year.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1520066.

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

RD 45Unclassified benefits

  1. An employer is liable to pay FBT on an unclassified benefit only within the limits described in this section.

  2. When FBT is paid quarterly, an employer is liable for FBT on an unclassified benefit provided to an employee in a quarter only if—

  3. the total taxable value of all unclassified benefits provided in the quarter to the employee by the employer, or by persons associated, at any time in the quarter, with the employer, is more than $300; or
    1. the total taxable value of all unclassified benefits in the categories described in subsection (4) provided in the last 4 quarters including the current quarter, whether accounted for on a quarterly or an income year basis, is more than $22,500.

      1. When FBT is paid on either an annual basis or an income year basis, except when subsection (5) applies, an employer is liable for FBT on unclassified benefits provided to an employee in the tax year or income year only if—

      2. the total taxable value of all unclassified benefits provided in the tax year or income year to the employee by the employer, or by persons associated, at any time in the tax year or income year, with the employer, is more than $1,200; or
        1. the total taxable value of all unclassified benefits in the categories described in subsection (4) provided in the tax year or income year is more than $22,500.

          1. The categories, for an employer, are—

          2. unclassified benefits provided by the employer to their employees:
            1. unclassified benefits provided by persons associated, at any time in the relevant period, with the employer to employees of the employer:
              1. unclassified benefits provided by the employer to employees of persons associated, at any time in the relevant period, with the employer:
                1. if the employer is a company, unclassified benefits provided by other companies that are part of the same group of companies as the employer, at any time in the relevant period, to employees of those other companies.

                  1. When an employer accounts for FBT on an income year basis, and the period for which they have accounted under section RD 60 differs from an income year for the reasons described in subsection (6), an employer is liable for FBT on unclassified benefits provided in the period only if—

                  2. the total taxable value of all unclassified benefits provided in the period to an employee by the employer, or by persons associated, at any time in the quarter, with the employer, is more than the figure that is the same fraction or multiple of $1,200 as the number of days in the period is a fraction or multiple of 365; or
                    1. the total taxable value of all unclassified benefits in the categories described in subsection (4) provided in the period is more than the figure that is the same fraction or multiple of $22,500 as the number of days in the period is a fraction or multiple of 365.

                      1. In subsection (5), the income year for which the employer has accounted may be longer or shorter than the normal income year because the employer has either—

                      2. started or ceased business during that income year; or
                        1. chosen, with the agreement of the Commissioner, to file a return under this subpart for the income year ending with the date of the annual balance of their accounts.

                          Notes
                          • Section RD 45: replaced, on , by section 154(1) (and see section 154(2) for application) of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).