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Some employers provide their employees with accommodation or pays an accommodation allowance to employees. This is generally treated as a benefit allowance. In most situations it will be taxable.

If you pay an accommodation allowance or provide an accommodation as a salary trade off agreement, this is treated as a taxable benefit allowance.

If you provide free board, you need to think about what is being supplied when calculating the taxable value. This includes any meals and electricity that are provided on top of the accommodation.

In certain circumstances, accommodation or accommodation payments may be tax exempt if provided:  

  • for out of town secondments or capital project
  • in connection with Canterbury earthquake reconstructions projects
  • when an employee is required to work in multiple locations on an ongoing basis
  • when required to stay overnight to attend a meeting, training course or conference.


Four types of employer provided accommodation are always non-taxable:

  • A berth, room or other lodging provided on a mobile workplace such as a ship, truck or oil rig.
  • A station in Antarctica lodging provided for shift workers such as fire fighters, ambulance staff and care givers when it’s needed to perform their duties.
  • Accommodation at remote locations outside New Zealand, such as mines in Australia where an employee is expected to fly in and fly out.