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Industry guidelines
Nga aratohu ahumahi
Industry guidelines: Screen production industry

Per diems and allowances

Per diems

Some contractors or entertainers working in the screen production industry, receive per diem (per day) payments in addition to payment for their services.

Per diems are payments you receive to cover the cost of meals and other minor expenses (such as laundry or phone calls) you may have when you are required to work away from your town or country of normal residence.

Per diems are part of your gross (total before tax) income and are subject to withholding tax. If you are required to file an income tax return, you need to include per diems as part of your income on the return.

You can claim tax deductions for such work-related expenses against your end-of-year tax. These are called allowable deductions. To claim deductions, you have to file a tax return. You'll need to keep your invoices and receipts to support any tax deductions you claim.

On 1 September 2003 Inland Revenue issued an expenditure determination regarding people working in the screen production industry. Where you are required to work away from home, you incur expenses relating to your work and you receive per diems, the determination will apply to you.

The determination allows that from 1 July 2003, people working in the screen production industry are able to receive up to NZ$60 per day in per diem allowances without having withholding tax deducted. If you receive $60 or less in per diems a day, you won't need to keep your invoices and receipts for income tax purposes.

Per diem payments of more than $60 per day will need to have withholding tax deducted by the payer on the amount over $60 (eg, if $70 is paid, withholding tax must be deducted from $10 of the payment). If you wish to claim per diem related expenditure greater that $60 for any day, you will need to keep all of your receipts in respect of that day.

Note to production companies: If you have a production where you will be paying a per diem of more than $60 and you can justify a higher amount, you can apply for a specific determination relating to that particular production.

If you receive a per diem payment but some goods or services for which the per diem is paid (eg meals) are provided, the $60 withholding tax exemption is reduced. See the examples below.

If all your costs are met by the screen production company, the $60 exemption does not apply. Withholding tax must be deducted from the full amount of any per diem payment you receive. You'll need to include any per diem received as gross (total before tax) income in your income tax return. As all costs are met by the screen production company, there will be no allowable deductions.

If your expenses amount to more than the per diem payment received, and you want to claim a deduction for the amount in excess of the per diem, you must keep receipts and invoices for all the expenses claimed for that particular day.

Note: To complete your GST returns, you'll need to keep all your receipts and invoices regardless of how much you receive in per diems. Also, per diems are paid exclusive of GST, so when you prepare your GST invoice, you will need to calculate GST on the per diems received.

Examples

These apply to both contractors and entertainers in the screen production industry.

  1. You receive a per diem allowance of $60 while required to work away from your town of normal residence. You pay for the cost of the goods and services for which the allowance is paid. The payer does not have to deduct withholding tax because the total payment does not exceed $60 per day.

  2. You receive a per diem allowance of $60 and you are working in your town of normal residence. As you are working in your town of normal residence the determination does not apply. The payer has to deduct withholding tax from the per diem allowance of $60.

  3. You receive a per diem allowance of $60. You are also provided with all meals while working, either on the set or at some other location. You haven't incurred the expense so the determination doesn't apply. The payer has to deduct withholding tax from the per diem allowance of $60.

  4. The payer provides you with goods and services to the value of $15 per day. Therefore the maximum amount you can be paid as a per diem without withholding tax being deducted is $45 per day.

  5. You receive a per diem allowance of $75. You pay the cost of the goods and services for which the allowance is paid. The payer has to deduct withholding tax from $15 of each daily payment as the payment exceeds the $60 threshold on a daily basis.

Accommodation allowances

If you are a contractor or entertainer working in the screen production industry, you may receive an accommodation allowance, although this is not common.

Accommodation allowances are payments to cover the cost of accommodation expenses you may have when you are required to work away from your town or country of normal residence.

If you receive an accommodation allowance this is treated as part of your gross income and is generally subject to withholding tax. If you are required to file an income tax return, you need to include the allowance as part of your income on the return.

However, you can claim tax deductions for such work-related expenses against your end-of-year tax. These are called allowable deductions. You'll need to keep all your invoices and receipts for accommodation expenses to support any deductions you claim against your end-of-year tax.

Other allowances

If you are an employee, you may receive allowances other than those mentioned above.

 

 


Date published: 05 Sep 2011

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