Employers sometimes help employees cover the costs of relocating themselves and immediate family for work. These payments may be tax free.
Paying or reimbursing your employee's relocating costs
If you pay or reimburse an employee's relocating costs, the payment may be tax free if they are relocating to:
- start employment with you
- stay with your company but start a new role at a new location
- stay in their current role but move to a new location.
Relocation expenses will generally only be tax free if the employee's home is a substantial travelling distance from the new workplace.
Only expenses that are on our list of eligible relocation expenses can be reimbursed tax free. The payment must reflect the actual cost. Costs must be incurred before the end of the tax year after the employee relocates.
Tax technical information
The tax technical website has more information about eligible relocation expenses.
Determination 09/04: Eligible relocation expenses (taxtechnical.ird.govt.nz)