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Fringe benefit tax
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Fringe benefit tax on employer contributions

Find out about managing fringe benefit tax (FBT) on your employer contributions to funds, insurance and superannuation schemes.

When you need to pay FBT on your employer contributions

As an employer, you have to pay FBT on contributions you make to:

  • sickness, accident or death benefit funds
  • friendly society insurance funds
  • life, pension, personal accident or sickness insurance policies
  • superannuation schemes where employer superannuation contribution tax (ESCT) doesn't apply
  • funeral trusts.

You also pay FBT on an insurance policy when you:

  • take out the policy for an employee and pay their premiums, or
  • are a life insurer and offer discounted premiums for your life insurance agents and their families.

You don’t pay FBT on an insurance policy when you:

  • Pay the premiums on a policy an employee takes out. This contribution should be accounted for in their gross salary or wage.
  • Take out a policy for an employee, pay their premiums and gain the benefit from the policy (the employee doesn't benefit at all). You don't include this contribution with their gross salary or wage.

Work out the taxable value of employer contributions

The taxable value of employer contributions is the total premium paid or amount contributed, including GST (unless the goods or services provided are GST exempt).

Work out the fringe benefit value of your contributions with our Fringe benefit tax on contributions to funds, insurance and superannuation schemes calculation sheet.

Record keeping for employer contributions

For all employer contributions, you need to keep the following records:

  • employee's name
  • description of benefit provided
  • date of the transaction, and
  • cost to you and to the employee (if any).

Attributed and non-attributed benefits

There’s a non-attributed threshold of $1,000 per employee, per year for all employer contributions. If you choose to attribute an employer contribution, you must attribute all employer contributions, even if the total amount is less than $1,000 per employee.

Specific records for sickness, accident or benefit funds

For contributions to sickness, accident or benefit funds, you also need to keep:

  • evidence of approval from Inland Revenue
  • names of the employees in the fund, and
  • amounts contributed for each employee.

Records for friendly society insurance funds and life, pension, personal accident or sickness policies

For contributions to insurance funds of a friendly society and life, pension, personal accident or sickness policies, you also need to keep:

  • the type of policy and date it was taken out
  • names of the employees covered by the policy, and
  • premium paid for each employee.

Records for superannuation scheme contributions

For your contributions to employee superannuation schemes, you also need to keep:

  • a copy of your approval letter from the Financial Markets Authority showing the type of superannuation scheme and date of approval
  • names of the employees in the scheme, and
  • amounts contributed for each employee.

Next steps