Rent for employee’s home 16 Jul 2020

You may wish to compensate an employee who has been using their home to help run your business during the Covid-19 lockdown.

Inland Revenue has issued a list of conditions for making a payment. These are contained in a publication called Determination EE002, which also sets out how much you are permitted to pay.

There is also the matter of how you pay a share of the equipment the employee is using, such as desks, carpet and light fittings. Inland Revenue allows a one-off lump sum payment of $400, without the need to have to produce any evidence of these costs.

If you read the determination, you will notice the employer can reimburse the employee up to $15 a week to cover all other expenditure. You will probably agree this is not very much.

You don’t have to follow this publication. If you and the employee want to work out an allowance based on actual costs and use this instead, that is fine.

The determination applies from 17 March 2020 to 17 September 2020.

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