1. Sam works for a plumbing company and uses the work van for his weekend surf trips. This is:
This is a perk, so the company must pay fringe benefit tax whether he uses the van or not.
2. Each Christmas, George takes his staff for lunch at a restaurant. This is:
If staff can only enjoy company entertainment at set times, the cost is an entertainment expense.
3. Greg buys his staff gym memberships to help them stay fit. Each membership costs $350 a quarter. This is:
It’s a staff perk, so Greg’s company must pay tax on it whether or not they hit the gym. It wouldn’t qualify for fringe benefit tax if the amount fell under the minimum threshold.
4. Jody gives her staff money to buy their own work suits because she wants them to look professional. This is:
Payments for an employee’s clothing are benefit allowances and are treated as normal salary, which is taxed through an employee’s PAYE.
5. IT consultant Laura is a sole trader who uses her business car for personal trips. This is:
Fringe benefit tax does not apply to sole traders. The expenses Laura can claim don’t include private use of her car.
6. Gerri works in a kitchen. The restaurant gives her a branded uniform. This is:
There’s no fringe benefit tax to pay on the uniform. It’s defined as distinctive work clothing, so a tax exemption applies.
7. Mark drives his own car to meet clients. His boss pays him back for running costs. This is:
It’s an expense for Mark’s boss. A payment to an employee to compensate them for on-the-job expenses is a tax-free reimbursement allowance.
8. Rebecca gives her employees movie vouchers to reward them for hitting sales targets. This is:
Any employment-related gifts or prizes are treated as benefits. But they don’t qualify for fringe benefit tax if the amount falls under the minimum threshold.
9. Theresa runs a scented candle business and lets her employees buy stock discounted to just above cost price. This is:
You pay fringe benefit tax on discounted goods if the price to the employee is less than the cost to the employer.
10. Cathy makes compulsory employer KiwiSaver contributions for her staff. This is:
Fringe benefit tax doesn’t apply to compulsory KiwiSaver employer contributions because they’re subject to Employer Superannuation Contribution Tax (ESCT).
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