Providing a person with accommodation in exchange for work can have income tax and GST implications, for both the provider and the worker.
This often happens with seasonal and casual workers in farming, hospitality and tourism industries. Accommodation arrangements may include food as well as a place to sleep. Accommodation provided may be on top of payment or instead of payment for work.
A business owner (like a farmer, restaurant owner, or someone in the accommodation business) who provides accommodation to workers in return for them carrying out tasks should be aware that there could be income tax, GST and other implications of providing that accommodation.
For example, the value of accommodation may have to be treated as salary or wages for the worker and, for owners of commercial dwellings like hotels, hostels or camping grounds, there will be GST on the supply of the accommodation.
Tax Technical advice
Read more on our Tax Technical website about when you need to pay tax on accommodation you provide to employees.