Accounting for allowances and benefits for staff: Special benefits
Taxing loss of earnings compensation
Loss of earnings compensation paid by ACC to your employees is liable for PAYE.
How to tax
ACC will deduct PAYE using the employee's tax code.
- If an injury occurs at work and you pay an employee for the period up until the time compensation is payable, you must deduct PAYE using the employee's tax code.
- If you subsidise the employee who is receiving compensation, deduct PAYE on the extra payment you make using the secondary tax rates.
- If you pay the employee's salary or wages and ACC subsequently reimburses you, deduct PAYE using the employee's tax code.
Date published: 18 Jan 2007
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