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Section 3.1.4 provides information regarding the required approach, where an employer provides payment, or reimbursement to an employee, which exceeds the tax-exempt allowable limit or is not considered to be tax-exempt at all. Sections 2.1.3, 2.1.4, and 2.4.4 offer further guidance.

Where an employer provides non-cash benefits to its employees, a different approach is required, to first determine the taxable value of the benefit before confirming the method for calculation of tax and the relevant reporting required. However, where an employer provides a non-cash benefit instead of a tax-exempt cash allowance, no fringe benefit tax will be due, and so no reporting will be required either.

It should be noted that there are no social security implications as there is no separate withholding within the New Zealand payroll legislative structure.

Non-cash benefits provided by an employer to their employees or their employees' associates