Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Income - Exempt income

CW 17B: Relocation payments

You could also call this:

“Tax-free payments for work-related moving expenses”

If you move for work-related reasons, your employer can pay for some of your moving expenses without you having to pay tax on that money. This is called exempt income.

Your employer can only pay for expenses that the Commissioner of Inland Revenue has listed as ‘eligible relocation expenses’. They can’t pay more than what you actually spent on these expenses.

You can only use this tax-free payment for expenses you have up to the end of the tax year after you move. If you move temporarily and it’s not counted as a work-related move, that doesn’t change this time limit.

A work-related move means you have to change where you live because:

Your workplace is too far to travel to each day from where you currently live, and
You’re starting a new job with a new employer, or you’re taking on new duties in a new place with your current employer, or you’re doing the same job but in a new location.

If your job includes accommodation as part of your work, you don’t have to meet the first requirement about your workplace being too far away.

The Commissioner can make a list of what counts as eligible relocation expenses. They can add to or change this list, but they have to tell people at least 30 days before any changes start. You can find more information about this in section 91AAR of the Tax Administration Act 1994.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM2539604.

Topics:

Money and consumer rights > Taxes

CW 17: Expenditure on account, and reimbursement, of employees, or

“Money your employer spends on your work expenses is tax-free”

CW 17C: Payments for overtime meals and certain other allowances, or

“Tax-free meals and allowances for some workers”

Part C Income
Exempt income

CW 17BRelocation payments

An amount that an employer pays to or on behalf of an employee in connection with the expenses of the employee in a work-related relocation is exempt income of the employee.
The amount paid must be no more than the actual cost incurred by or on behalf of the employee on an expense that the Commissioner lists as an eligible relocation expense in a determination made under subsection (6).
Subsection (1) applies only to expenditure incurred to the end of the tax year following that in which the relocation occurs. For the purposes of this subsection, a temporary move that has not been treated as a work-related relocation under this section is ignored.
Work-related relocation means a relocation of the place where an employee lives that is required—
because the employee's workplace is not within reasonable daily travelling distance of their residence; and
as a result of the employee—
1. taking up new employment with a new employer; or
2. taking up new duties at a new location with their existing employer; or
3. continuing in their current position but at a new location.

The requirement in subsection (4)(a) for a person's workplace to be beyond reasonable travelling distance of their residence does not apply to a person whose accommodation forms an integral part of their work.
The Commissioner may issue a determination for the purposes of this section under section 91AAR of the Tax Administration Act 1994 to provide a list of eligible relocation expenses, and may extend or modify the list from time to time as required. The Commissioner must give at least 30 days' notice of the implementation date of any alteration.

Notes

Section CW 17B: inserted (with effect on 1 April 2008), on 6 October 2009, by section 45 of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).