ENTERTAINMENT EXPENSE ITEMS Here is a list of common travel and entertainment expense items and their tax treatment - Food and drink while out of town on business when eating alone or with other team members 100% deductible and no FBT - Food and drink while overseas on business eating with team members, customers, suppliers, prospects etc. 100% deductible and no FBT - Food and drink with customers, suppliers, prospects etc. either in or out of town on business 50% deductible and no FBT - Non-taxable meal allowances paid to employees working overtime 100% deductible and no FBT - Morning and afternoon teas 100% deductible and no FBT - Lunches and more than incidental food & beverages for employees 50% deductible and no FBT - Samples provided for advertising 100% deductible and no FBT - Food & beverages as part of training seminars, conferences, trade displays that are at least 4 consecutive hours 100% deductible and no FBT - Rugby, show, movie tickets etc. for staff and used when staff member chooses 100% deductible and subject to FBT* - Sporting, cultural or other recreational activities, e.g. golf or corporate box 50% deductible and no FBT - Hire of boat to entertain customers, suppliers, prospects etc. 50% deductible and no FBT - Friday night drinks, staff parties and other social functions (whether at the office or elsewhere) e.g. Christmas parties, reception for existing or potential customers, suppliers etc. This includes any supporting expenses i.e. transport (taxis), crockery hire, glasses, waiters, music, etc. 50% deductible and no FBT - Gift for client, employee, supplier etc. which contains food and drink 50% deductible and no FBT - Gift for client, excluding food and drink 100% deductible and no FBT - Gifts for employees (or spouse) 100% deductible and subject to FBT* - Gift for non employee who helped with job 100% deductible and no FBT - Gym membership for an employee paid by the employer 100% deductible and subject to FBT* - Gift cards/vouchers (no GST claim as GST triggered when voucher used) 100% deductible and subject to FBT* or PAYE** * FBT applies to "closed loop" gift cards (cards that are limited to where they can be used e.g. Farmers, Countdown, Mitre 10 etc). You are only subject to FBT if you are over the exemptions. These are $300 per quarter per employee, or $22,500 per annum for all employees. If you reach either of these in any period, you are required to pay FBT on the total amount. Note there is a $1,200 per employee per annum threshold if you are filing FBT on an annual basis. ** PAYE applies to "open loop" gift cards (cards that can be used almost anywhere e.g. Prezzie Card, Visa/Mastercard prepaid cards etc). These cards are treated as cash equivalent and PAYE must be withheld on the grossed up value of the card. There is no value exemption on these cards. This list is designed to be an overview of the tax treatment of common entertainment expenses. If you have a question relating to this list, or you have another expense you would like clarification on, please contact us. GST is not claimable on 50% portion.

Key Proposed Changes 1. “Specified Contractor” Gateway Test The Bill proposes a clearer test to distinguish independent contractors from employees. If all of the following criteria are met, a worker qualifies as a specified contractor, and is excluded from the legal definition of an "employee": 1. A written agreement specifies they are an independent contractor. 2. They are not restricted from working for others (except when engaged with the contracting party). 3. They are not required to work at specified times or days, or can subcontract their work (subject to vetting/statutory compliance). 4. The contract does not terminate if the contractor declines additional work. 5. The contractor had a reasonable opportunity to obtain independent advice before entering into the arrangement. Implications: This aims to increase business flexibility and clarity. Contractors who meet the test cannot challenge their status in the Employment Relations Authority or Courts. 2. Remedy Assessment in Personal Grievances The Bill would narrow remedies available in personal grievance cases if the employee is found to have: * Committed serious misconduct (no remedies available). * Contributed to the grievance situation (no reinstatement or compensation for hurt, humiliation, or loss of benefit; other remedies may still apply but can be reduced by up to 100%). * Additionally, adjudicators (Authority or Court) must consider whether the employee’s conduct impaired the employer’s ability to act fairly, and raise the bar for procedural error claims. 3. High-Income Threshold for Unjustified Dismissal Claims Employees earning over NZD 180,000 per annum (base salary only—excluding bonuses, allowances, commissions, overtime, superannuation) would not be eligible to raise personal grievances for unjustified dismissal —unless they explicitly opt in via their employment agreement. * Key details: * A 12-month transitional period will apply for existing employees (unless they opt in earlier). * The income threshold will automatically adjust annually based on average weekly earnings, which introduces complexity in ongoing compliance. 4. End of the “30-Day Rule” for Collective Agreements * The “30-day rule”—which required terms of a collective agreement to apply to new employees for their first 30 days before they could move to an individual agreement—is to be repealed. * Under the proposed change: * Employers would provide new employees with information about collective agreements and unions. * Employees can immediately choose to sign an Individual Employment Agreement (IEA), which may include a **90-day trial period** if agreed. Additional Context & Commentary * Intent and Government Rationale: The Bill is positioned by the Government as a means to enhance labour market flexibility, reduce compliance costs, boost business innovation, and rebalance employer-employee interests, particularly in the personal grievance sphere. * Current Status: As of July 2025, public submissions were open (closing 13 August 2025), and the Bill was advancing through the select committee and readings. * Notably, in June 2025 the Parliament rejected amendments proposing to delay commencement to June 2026, keeping an earlier timeline —perhaps December 2025—for enactment. Summary Table Key Change - Description & Effects “Specified Contractor” Test - Workers meeting five criteria are excluded from employee status—limiting legal challenges Remedy Restrictions - Serious misconduct or employee contribution reduces or eliminates remedies $180,000 Threshold - High-earning employees excluded from unfair dismissal claims unless they opt in Repeal of 30-Day Rule - Allows immediate use of IEAs and 90-day trials for new hires, bypassing collective terms What to Watch Next Select Committee Process: Ongoing debates, public submissions, and possible amendments. Threshold Adjustments: Details on how the automatic salary threshold updates will work. Implementation Timeline: While December 2025 is possible, it depends on the legislative process and Royal Assent.  Sources: [1]: https://www.bellgully.com/insights/the-employment-relations-amendment-bill-has-landed-and-it-has-the-potential-to-transform-employment-relations-in-new-zealand/?utm_source=chatgpt.com "The Employment Relations Amendment Bill has landed" [2]: https://www.dentons.co.nz/en/insights/articles/2025/june/19/employment-relations-amendment-bill-2025?utm_source=chatgpt.com "Employment Relations Amendment Bill 2025" [3]: https://www.laneneave.co.nz/news-events/era-four-key-changes/?utm_source=chatgpt.com "Explained: Employment Relations Amendment Bill" [4]: https://www.parliament.nz/en/pb/hansard-debates/rhr/combined/HansDeb_20250624_20250625_52?utm_source=chatgpt.com "Employment Relations (Pay Deductions for Partial Strikes) ..." [5]: https://knowledge.dlapiper.com/dlapiperknowledge/globalemploymentlatestdevelopments/2025/significant-amendments-to-the-employment-relations-act?utm_source=chatgpt.com "Significant amendments to the Employment Relations Act" [6]: https://www.lexology.com/library/detail.aspx?g=b905b99b-6503-4444-b0a3-be27a0d206fa&utm_source=chatgpt.com "Key insights into the new Employment Relations ..." [7]: https://www.parliament.nz/en/pb/sc/committees-press-releases/public-submissions-open-on-the-employment-relations-amendment-bill/?utm_source=chatgpt.com "Public submissions open on the Employment Relations ..." [8]: https://www.mbie.govt.nz/dmsdocument/30958-employment-relations-amendment-bill-2025-approval-for-introduction-proactiverelease-pdf?utm_source=chatgpt.com "Employment Relations Amendment Bill 2025: Approval for ..." [9]: https://www.humankind.nz/blog/an-update-on-employment-law-changes?utm_source=chatgpt.com "An update on employment law changes - Humankind NZ"