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Budget 2025 | The Government has introduced changes to Working for Families and KiwiSaver as well as introducing Investment Boost: an immediate tax deduction when acquiring new business assets. Find out more: www.budget.govt.nz

You can reimburse employees for actual expenses they've paid while doing their job. These expenses are not taxable. However, if the payment is more than the employment-related expenses, the excess amount is taxable.

Reimbursing expenses include:

  • meals
  • clothing
  • mileage
  • vehicles
  • tools.

To calculate the reimbursement allowance, you need the employee to provide a receipt. This needs to be based on average costs and be a reasonable amount. Add the amount of tax-free allowance to your employee's net salary or wages (after PAYE) when you pay them. Show the total tax-free allowance paid in your wage book. Do not show the tax-free amount on your employment information schedule.

Alternatively, if you are regularly reimbursing the employee for a particular cost, you could pay them a regular allowance instead.

KiwiSaver employee deductions are calculated on the excess amount at the employee's normal rate according to the agreement between the employer and the employee.

Last updated: 20 Dec 2024
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