FBT Obligations to Deceased Employee is changing

Employers may provide their employees with benefits such as health insurance, contributions to superannuation schemes or even a vehicle. These are all fringe benefits and are subject to fringe benefit tax (FBT) if the employee who is the recipient of the benefit is also receiving a taxable PAYE income payment.

If there is no taxable PAYE income being derived, the benefits received by the employee are not fringe benefits and no FBT is payable by the employer.

 Proposed Amendment

The amendment proposes to make clear that payments made to an employee after they have passed away or no longer work in NZ, for services provided in NZ, should not trigger a fringe benefit liability. Only benefits provided to employees which relate to a  period of work in NZ will be subject to FBT.

Effective Date

The proposed amendments will be effective from 1 April 2024.

{proforms 1}