Tax cut on overtime meal allowances and relocation payments

The government announced this week that it will introduce changes ensuring that employer payments for employee relocation expenses and overtime meal allowances are not taxable to the employees who receive them.

The proposed changes, which are intended to remove uncertainty over the tax treatment of these payments, will apply to payments made over the last four years, as well as to future payments.

The government has decided to make these payments and allowances tax-free because they are of small private benefit to the employee concerned, hard to measure and not readily substitutable for salary and wages.

For more information visit the IRD’s website here and here, or call the Union Support Centre on 0800 186 466.