Tax Implications of Working for Accommodation

April 8, 2019

A business owner (like a farmer, restaurant owner, or someone in the accommodation business) who provides accommodation to workers in return for them carrying out tasks should be aware that there could be income tax, GST and other implications of providing that accommodation.

For example, the value of accommodation may have to be treated as salary or wages for the worker and, for owners of commercial dwellings like hotels, hostels or camping grounds, there will be GST on the supply of the accommodation.

It is especially important for businesses in industries like farming, hospitality and tourism who engage students, backpackers and other casual workers for seasonal or short-term arrangements to be aware of this issue.

You can find out more on the IRD website about:

determining who is an employee
the market rental value of the accommodation
expenses that might be deductible to the business owner
the possible GST that might be payable by the business and worker, and
other relevant issues that may need to be considered.

Find out more about the tax implications of working for accommodation

*Content courtesy of the IRD.