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Allowances

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.

Mileage rate for self-employed people and reimbursing employees

If you're self-employed you can use our mileage rate to calculate the cost of using your motor vehicle for business purposes. If you're an employer you can calculate an employee's reimbursement when they use their private vehicle for work purposes. Employers may also use rates published by a reputable independent New Zealand source to reimburse their staff.

Reimbursing relocation expenses

Payments that reimburse expenses for work-related employee relocations can be exempt income of the employee provided certain conditions are met.

Volunteer expenses

Volunteers often have expenses associated with their voluntary activities either from the activity itself or travel to or from where the activity took place. Reimbursement payments based on actual expenditure or a reasonable estimate are exempt income.

Benefit allowances

Benefit allowances are payments made to employees in addition to salary or wages. Food or accommodation may also be a benefit allowance. Tax is payable on the difference between the market value of the benefit, and any amount the employee actually pays.

Travelling allowances

A travelling allowance is paid to an employee for travel between home and work and can be tax-free providing certain conditions are met.

Reimbursing allowances

Reimbursing allowances are paid to employees to cover on-the-job expenses such as meals, mileage or tools. In most cases they are not taxable.

GST on allowances

If you are registered for GST, you can claim GST credits on reimbursements paid to employees for business expenses. You cannot claim GST credits on other allowances paid to employees.

 

 


Date published: 16 Sep 2004

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