Payments to employees for working from home costs during COVID-19 pandemic

Inland Revenue is making it easier for employers to reimburse the expenses of employees who are working from home because of the COVID-19 pandemic. This means employers can pay employees up to $20 a week tax-free for expenses (additional heating costs, telecommunication usage costs etc), without having to estimate or show what the employee's actual expenses were. Employers can also make a tax-free payment of up to $400 per employee for furniture costs, without having to gather evidence on how the money is spent. The rules are a "temporary response" to the COVID-19 pandemic and would only apply to payments for expenses incurred between 17 March 2020 and 17 September 2020. Inland Revenue said its ruling was not intended to suggest that employers should feel obliged to make such payments to staff who are working from home. It is acknowledged that many employers will not be in a financial position to make additional payments to employees during the COVID-19 pandemic. For further information visit IRD. Please feel free to contact us or phone Kelly on her DDI 03) 928 4066.