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Showing posts from February, 2013

Fringe Benefit Tax (FBT)

This is a tax paid by the employer on certain benefits given to an employee.The most common one of these is a motor vehicle. There is however exemptions from paying FBT on vehicles in these 4 circumstances:
The vehicle is a work-related vehicle and it is not available for general private use and the following apply (Full exemption):

Employees or shareholders store the vehicle at home and
It may not be used for general private purposes and
It is a work related vehicle which means the following

principal design of the vehicle cannot be for carrying of passengers,
the exterior of the vehicle must permanently and prominently display the name of the employer or the business logo,
the employer must inform the employee in writing that the only personal use of the vehicle is travel between work and home or travel incidental to business travel (for example, passing by the bank on the way home from work).
The employer must conduct a check,at least quarterly, that the above is adhered to.

Work-related …

Mileage Rates

As part of running your business, you and/or your staff more than likely travel.

It is often seen as more effort than worth it to do a log book for all travel, record the associated expenses for the year and then apportion the business percentage.

There is an easier way for smaller businesses.

The IRD determines a rate for mileage claims/rebates so that business can use this rate for all kilometers travelled. This rate reflects the average costs associated with running a motor vehicle.

The rate can be used for all mileage during the year that is 5000 km or less.

A logbook of the travel claimed still needs to be done, but the actual costs of running the vehicle are not required.

Inland Revenue has reviewed the motor vehicle mileage rate and has changed it for the 2012 income year to 77 cents per kilometre for both petrol and diesel fuel vehicles. This rate does not apply to motor cycles.

It is appropriate to use this rate to reimburse staff for travel, or to on-charge mileage to custom…

Are Casual Employees Really Casual?

Its easy to fall into the situation where you employ someone on a casual basis to meet a need of the business with all intentions of it being a short time i.e. in a peak period.

But time flies and we are all busy that sometimes it never gets re-looked at.

The employee is happy - they have continuous regular income. You are happy, the initial need is being met and your focus is now on other things. So where's the problem you might ask?

The problem comes when there is disagreement between the employee and the business or when you try end the "casual contract". If the employee takes the claim to the courts, the court would look at "substance over form" ie the actual working pattern and payments will outweigh the written contract.

Some pointers to consider when deciding what type of employment is being offered:

Employment of a permanent nature is:
predictable and consistent work patternmutual employment obligations ie obligation of employer to provide work and the e…