New Zealand accountants urge for WFH tax policy

Chartered Accountants NZ tax leader John Cuthbertson said, “The extension of tax relief for employers with employees working from home comes not a moment too soon, given the latest COVID lockdowns. The latest lockdown shows that our new way of working is here to stay, and that a permanent working from home tax policy is needed.” 

Cuthbertson added that as people work from home, they incur more expenses on utilities such as internet, power and heating. Employers have the option to reimburse employees NZ$20 (US$14) per week tax free, before needing evidence of the expenses under the extended determination which will be effective till 2023. 

“One benefit of the new determination is that the previously fragmented tax advice on working from home is now combined,” Cuthbertson said, adding that “the ‘bring your own device’ tax guidance is in this determination, even though it’s not strictly limited to working from home. There is a natural fit for it to be here.” 

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The Inland Revenue said as many employees now work from home due to the global pandemic, some employers may provide a special allowance to cover extra costs, but it is up to the employer to determine if this allowance is taxable or not. 

However, the department said, in many cases, the employee will be expected to bear these additional costs, according to NZ Herald.