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Te tāke painga tāpiri mō ngā takoha kaituku mahi Fringe benefit tax on employer contributions

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You must pay fringe benefit tax (FBT) on contributions you make to any employee’s:

  • sickness, accident or death benefit fund
  • life, pension, personal accident or sickness insurance policy
  • friendly society insurance fund
  • superannuation scheme where employer superannuation contribution tax (ESCT) does not apply
  • funeral trust.

You pay FBT on contributions you make to an insurance policy when you:

  • take out the policy for an employee and pay their premiums
  • are a life insurer and offer discounted premiums for your life insurance agents and their families.

You do not pay FBT on contributions you make to an insurance policy when you:

  • pay the premiums on a policy which an employee took out. This is accounted for in their gross salary or wage.
  • take out a policy for an employee, pay the premiums and gain all the benefit from the policy. Your contributions are not included with their gross salary or wage.

Record keeping for employer contributions

If you make employer contributions you need to keep a record of:

  • the employees who received the benefit
  • the benefit provided
  • the date of the transaction
  • the cost to you
  • any cost to the employee.

Additional record keeping for sickness, accident or benefit fund contributions

If you make contributions to sickness, accident or benefit funds you also need to keep a record of:

  • evidence of approval from Inland Revenue
  • the employees in the fund
  • the amounts contributed for each employee.

Additional record keeping for friendly society insurance funds and life, pension, personal accident or sickness policy contributions

If you make contributions to insurance funds of a friendly society or life, pension, personal accident or sickness policies you also need to keep a record of:

  • the type of policy
  • the date the policy was taken out
  • the employees covered by the policy
  • the premium paid for each employee.

Additional record keeping for superannuation scheme contributions

If you make contributions to employee superannuation schemes you also need to keep a record of:

  • your approval letter from the Financial Markets Authority showing the type of superannuation scheme and date of approval
  • the employees in the scheme
  • the amounts contributed for each employee.

Attributed and non-attributed benefits for employer contributions

Attributed benefits are fringe benefits that only one employee uses, so they are assigned to that person. Non-attributed benefits are not assigned to an individual employee, so are shared.

In the case of employer contributions, if you provide $1,000 or less contributions per employee each year you can account for these as non-attributed benefits. You must either account for all contributions as attributed benefits or account for them all as non-attributed benefits.