How do you work out how much to pay an employee for their use of their home phone and internet plan?
Bear in mind you are not supposed to reimburse for costs the employee would incur anyway.
To make it easier for everyone, Inland Revenue has come up with what it calls “De Minimus Options”:
“De Minimus Options”:
Employee works from home but does not use their own telecommunications tools and/or plans:
You can reimburse up to $20 per week.
Employee works from home and uses their own telecommunications tools and/or plans:
Option 1. Up to $27 per week irrespective of level of business use or,
Option 2. Up to $20 per week plus either up to 75% (principally business use) or up to 25% (principally private use) of the total usage plan and depreciation using the same applicable percentage.
Employee does not work from home, but uses their own telecommunications tools and/or plans:
Option 1. Up to $7 per week irrespective of business use.
Option 2. either a maximum of 75% (principally business use) or 25% (principally private use) of the total usage plan and depreciation using the same applicable percentage.
If your client uses prepay, Inland Revenue will accept a reasonable estimate of the likely expenditure.
