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Accounting for allowances and benefits for staff

Holiday pay, bonuses, allowances, and special benefits paid to employees such as loss of earnings compensation or life insurance premiums are usually liable for tax.

Legislation enacted on 30 June 2014 clarifies when accommodation and employee allowances are non-taxable.

Most of the new rules will take effect from 1 April 2015 but employers who meet certain criteria may be able to apply some of the new rules from 1 January 2011.

Find out more in the Employee allowances special report on our Tax Policy's website.

Holiday pay

You can use the online calculator or the PAYE deduction tables to work out holiday pay and pay for statutory holidays.


Bonuses paid to staff are taxable. How this is done depends on the type of bonus.


Some allowances are taxable and others are tax free. Our mileage rate can be used to reimburse travel expenses. GST credits can be claimed for reimbursement allowances.

Special benefits

Special employment benefits such as prize money; loss of earnings compensation; life and personal accident insurances; and honoraria may be subject to PAYE or withholding tax.