New Zealand

Employment expenses

Generally, no deduction is allowed for expenditure incurred in deriving employment income. It is therefore necessary that employers assess the correct tax treatment of allowances and expense reimbursements at payroll (PAYE) submission time.

Business deductions

Deductions are available for expenditure incurred in deriving assessable or excluded income (other than employment income) incurred in the course of carrying on a business. Subject to the entertainment expenditure provisions, certain entertainment expenditure is only 50% deductible.

The new Government reinstated interest deductibility in relation to residential properties. Since 1 April 2024, interest deductibility has been available for 80% of interest expenses incurred in relation to residential property. From 1 April 2025, interest expenses are 100% deductible.

Personal deductions

No deduction is permitted for medical, superannuation, or insurance contributions. Certain insurance premiums may be allowed as a deduction under the general permission (i.e. loss of earnings).

Charitable contributions

Taxpayers are eligible for a tax credit for charitable donations/contributions made during the tax year. See the Other tax credits and incentives section for more information.