This determination is made under section RD 8(3) and shall apply to honorarium paid to the Royal New Zealand Plunket Trust (“Plunket”) volunteers who undertake voluntary activities for Plunket.
Scope:
Honorarium paid to Plunket members come within the definition of “schedular payment” under section RD 8. Schedule 4, Part B requires PAYE to be deducted from honorarium at the rate of 33%, unless an exemption applies.
Section CW 62B provides that an amount that is a reimbursement payment to cover expenses incurred by a volunteer when undertaking a voluntary activity, is exempt from income tax.
Determination:
When any Plunket volunteer receives honorarium as reimbursement of expenditure that person had incurred in carrying out Plunket related activities, that payment up to a maximum of $800 per tax year, shall be regarded as expenditure incurred in the production of that payment. However, if the volunteer receives any reimbursement (in addition to honorarium) for expenditure they have incurred, the amount exempted under this determination ($800) shall be reduced by that additional reimbursement.
Example:
Shruti is a Plunket volunteer and she receives a payment of $715.00 at the end of January. During tax year, she also received 4 smaller payments of $85 each as a reimbursement of travel expenses incurrent for Plunket related activities, making a total of $1,055.00.
As Shruti received reimbursement payments of $340.00 earlier in the year, only $460.00 of honorarium received in January could be regarded as expenditure incurred under this determination.
Therefore, tax of $84.15 should be deducted from the balance ($255) of the honorarium.