The Business Advisory Blog

The Business Advisory Blog

Insight, news and updates from Alliott NZ Chartered Accountants, Auckland New Zealand. The views expressed here are the views of the author and should be discussed in further detail should an article be relevant to your individual circumstances.

While every effort has been made to provide valuable, useful information in this publication, this firm and any related suppliers or associated companies accept no responsibility or any form of liability from reliance upon or use of its contents. Any suggestions should be considered carefully within your own particular circumstances, as they are intended as general information only.

Greg Millar
Published on

Non-monetary gifts to employees at Christmas may be unclassified fringe benefits (UFBs) and could be subject to fringe benefit tax (FBT). 

xmas party-601UFBs include all benefits provided by employers to employees in connection with their employment that aren’t classified or excluded in subpart CX of the Income Tax Act 2007 (“ITA”). 

Most commonly, these benefits are free or discounted goods and services provided by employers to employees.

Employers must pay FBT on UFBs when the total value of:

  • UFBs provided to an individual employee in a quarter exceeds $300 (GST inclusive). The threshold is $1,200 for filing on annual/income year basis, or
  • all UFBs provided to employees in the 12 months before the end of the current FBT filing period exceeds $22,500 (GST inclusive).

Note: If the total value of UFBs for all employees exceeds $22,500 for the current quarter and the three previous quarters, the employer must pay FBT on the total value of the goods and services benefits in the current quarter.

You can find some examples on IRD's website or call the team at Alliotts in Auckland today on 09 520 9200.
Source IRD

Topics: employers FBT tax