Section CW 18 — Income Tax Act 2007: Allowance for additional transport costs

CW 18 Allowance for additional transport costs Exempt income (1) An allowance that an employee receives from an employer to reimburse the employee’s additional transport costs is exempt income to the extent to which the employee incurs the costs in connection with their employment and for the employer’s benefit or convenience. Estimated expenditure of employees (2) For the purposes of subsection (1),— (a) the employer may make, for a relevant period, a reasonable estimate of the amount of expenditure likely to be incurred by the employee or a group of employees for which reimbursement is payable; and (b) the amount estimated is treated as if it were the amount incurred during the period to which the estimate relates. Meaning of additional transport costs (3) In this section, additional transport costs means the costs to an employee of travelling between their home and place of work that are more than would ordinarily be expected. The costs must be attributable to 1 or more of the following factors: (a) the day or time of day when the work duties are performed: (b) the need to transport any goods or material for use or disposal in the course of the employee’s work: (c) the requirement to fulfil a statutory obligation: (d) a temporary change in the employee’s place of work while in the same employment: (e) any other condition of the employee’s work: (f) the absence of an adequate public passenger transport service that operates fixed routes and a regular timetable for the employee’s place of work. Quantifying additional transport costs (4) Additional transport costs are quantified as follows: (a) when the additional transport costs are attributed to a factor described in any of subsection (3)(a) to (e), the amount by which the costs are more than the employee’s ordinarily expected travel costs without reference to that factor: (b) when the additional transport costs are attributed to the factor described in subsection (3)(f), the amount by which the costs are more than $5 for each day on which the employee attends work: (c) except in special circumstances, the costs of travelling any distance over 70 kilometres in 1 day are not taken into account in calculating additional transport costs. Defined in this Act: additional transport costs , amount , employee , employer , exempt income , pay , Compare: 2004 No 35 s CW 14