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Income Tax Act 2007

General collection rules - Employment-related taxes - Attributing fringe benefits to employees

RD 53: Pooling non-attributed benefits

You could also call this:

“Grouping certain employee benefits for tax purposes”

When you give certain types of fringe benefits to your employees, you need to pool them together. This means you group them instead of giving them to specific employees. You do this for benefits like those given to former employees, certain loans from life insurance companies, and some types of transport you subsidise.

At the end of the tax year, you need to create two separate pools. One pool is for major shareholders and people connected to them. The other pool is for all your other employees.

For the last quarter of the tax year, you need to work out the fringe benefit tax (FBT) on the total value of the benefits in each pool. For the pool with major shareholders, you use a rate of 63.93%. For the pool with other employees, you use a rate of 49.25%.

This rule helps you manage fringe benefits that you can’t easily link to specific employees or that fall into special categories.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1520107.

Topics:
Money and consumer rights > Taxes
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Part R General collection rules
Employment-related taxes: Attributing fringe benefits to employees

RD 53Pooling non-attributed benefits

  1. This section applies in a tax year when an employer provides a fringe benefit that is—

  2. a benefit provided to a former employee; or
    1. an employment-related loan provided by a life insurer under section CX 11 (Employment-related loans: loans by life insurers); or
      1. a benefit to which section RD 48 applies that cannot be attributed to a particular employee; or
        1. an attributed benefit to which section RD 49(2) applies; or
          1. subsidised transport to which section RD 49(3) applies.

            1. The employer must pool the value of the benefits.

            2. For the final quarter of the tax year, the employer must create 2 pools, 1 for each of the following groups of persons:

            3. the first pool is for an employee who is a major shareholder, or a person associated with an employee who is a major shareholder (unless that person receives the fringe benefit as an employee of the employer):
              1. the second pool is for all other employees.

                1. The employer must calculate FBT for the final quarter of the tax year on the annual taxable value of the pooled fringe benefits—

                2. at the rate of 63.93% for the first pool; and
                  1. at the rate of 49.25% for the second pool.

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                    Notes
                    • Section RD 53(4)(a): amended, on , by section 9(1) (and see section 3 for application) of the Taxation (Income Tax Rate and Other Amendments) Act 2020 (2020 No 65).
                    • Section RD 53(4)(b): amended, on , by section 9(2) (and see section 3 for application) of the Taxation (Income Tax Rate and Other Amendments) Act 2020 (2020 No 65).