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New Zealand law explained for everyone

Accident Compensation Act 2001

Preliminary provisions

10: Earnings as an employee: payments to spouse or partner

You could also call this:

"Money your spouse pays you for work: when it counts as earnings"

When you work for your spouse or partner, the money you get paid isn't usually counted as earnings from employment for a tax year. This is different from working for other people.

However, this rule can change if your spouse or partner asks the Commissioner for permission to count the money they pay you as a business expense. They need to do this in writing.

If the Commissioner says yes, then the money you get paid will count as your earnings. This starts from the day the Commissioner gets the request. It includes the work you do and the money you get paid after that day.

Sometimes, the rules can be a bit more flexible. If you work for your spouse or partner, and they include the money they pay you as a business expense in their tax return, and you include that money in your own tax return and pay tax on it if needed, then the Corporation might accept this as following the rules.

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This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM100611.

Topics:
Money and consumer rights > TaxesWork and jobs > Worker rights
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9: Earnings as an employee: what it means, or

"What counts as money you earn from your job"

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11: Earnings as an employee: what it does not include, or

"Things not counted as your earnings when you're an employee"

Part 1Preliminary provisions

10Earnings as an employee: payments to spouse or partner

  1. Earnings as an employee, in relation to any person and any tax year, does not include any amount paid to the person (person A) for services he or she performs for his or her spouse or partner (person B), as person B's employee or otherwise.

  2. However, subsection (1) does not apply if person B, in order to calculate his or her income for the purposes of the Income Tax Act 2007, has made a written application for, and obtained, the Commissioner's consent to a deduction being made for any amounts paid by person B to person A for the services person A performs.

  3. If subsection (2) applies, account must be taken of the following in determining person A's weekly earnings for as long as the Commissioner's consent relates to the services and to the amounts paid:

  4. the services performed by person A after the date on which the Commissioner receives person B's application; and
    1. any amounts paid after the date on which the Commissioner receives person B's application.

      1. The Corporation may accept that there has been sufficient compliance with subsection (2), and levies are payable accordingly, if—

      2. person A provides services to person B; and
        1. person B submits or has submitted a return of income to the Commissioner; and
          1. person B shows the amounts paid to person A for such services in the return as an expense incurred in the production of income for the purposes of the Income Tax Act 2007; and
            1. person A includes the amounts paid to him or her by person B for such services in a return of income submitted to the Commissioner; and
              1. person A pays or has paid tax (if appropriate) on such amounts.

                Notes
                • Section 10 heading: amended, on , by section 8(1) of the Injury Prevention, Rehabilitation, and Compensation Amendment Act 2005 (2005 No 12).
                • Section 10(1): amended, on , by section 8(1) of the Injury Prevention, Rehabilitation, and Compensation Amendment Act 2005 (2005 No 12).
                • Section 10(1): amended, on (effective for 2005–06 tax year and later tax years, except when the context requires otherwise), by section YA 2 of the Income Tax Act 2004 (2004 No 35).
                • Section 10(2): amended, on (effective for 2008–09 income year and later income years, except when the context requires otherwise), by section ZA 2(1) of the Income Tax Act 2007 (2007 No 97).
                • Section 10(4)(c): amended, on (effective for 2008–09 income year and later income years, except when the context requires otherwise), by section ZA 2(1) of the Income Tax Act 2007 (2007 No 97).
                • Section 10(4)(c): amended, on (effective for 2005–06 tax year and later tax years, except when the context requires otherwise), by section YA 2 of the Income Tax Act 2004 (2004 No 35).