From 1 July 2025, specific Inland Revenue guidance will apply to per diem allowances paid to contractors and entertainers in New Zealand’s screen production sector — a timely reminder for Australian production companies, crew suppliers, and studios operating across the Tasman to review their pay structures and tax obligations.
What the Determination Covers
Inland Revenue has issued Determination DET 25/03, which sets out how per diem allowances paid to contractors and entertainers working in New Zealand’s screen production industry should be treated for income tax purposes.
This applies to both resident and non-resident contractors or entertainers who receive per diem payments while working away from their normal place of residence on a New Zealand screen production. The determination clarifies what portion of those payments is considered “expenditure incurred in the production of the payment” under the Income Tax Act 2007.
The Key Threshold – NZD $100 per Day
Under the new determination, up to $100 per day of a per diem allowance will be regarded as expenditure incurred — meaning this portion is not taxable income when the allowance is related to genuine work expenses such as accommodation, meals, or incidental costs.
However:
- If the per diem paid is less than $100 per day, the full amount is treated as expenditure incurred (and therefore exempt).
- If the contractor or entertainer is also provided with goods or services (for example, accommodation or meals) by the payer or a related party, no part of the per diem will be treated as expenditure incurred — effectively making it fully taxable.
This provides clarity for both payers and contractors in determining what portion of per diem payments should be included in taxable income.
What This Means for Australian Businesses
For Australian-based production companies or suppliers with contractors in New Zealand, this change will directly affect how you calculate and report schedular payments.
Many Australian businesses operating in New Zealand may not realise that different per diem rules apply under NZ tax law, particularly around how much is deemed to be “expenditure incurred.” Ensuring compliance with these new rules can help avoid unnecessary withholding tax errors or disputes with Inland Revenue.
At NZ Tax Accountants, we specialise in assisting Australian businesses with New Zealand tax compliance, including schedular payments, GST registration, PAYE obligations, and cross-border structuring for the film and creative industries.
Our Insight
This determination offers welcome certainty for screen industry contractors — particularly for short-term or location-based work. However, as production arrangements often involve a mix of cash payments and in-kind benefits, it’s important to carefully assess how allowances are structured and documented to ensure the correct tax treatment.
Even small discrepancies can lead to non-compliance if Inland Revenue reviews your arrangements — especially when dealing with cross-border workers.
If your production company, agency, or contractor base includes work undertaken in New Zealand, now is the time to review your per diem policies and payment structures before the new rules take effect on 1 July 2025.
Contact NZ Tax Accountants today for tailored guidance on how this determination affects your business — and ensure your New Zealand operations stay compliant and efficient.
The information in this article is indicative of NZ tax rules and changes and not intended to be complete for all intents or purposes and does not constitute advice. It is recommended that you obtain professional advice, suited to your particular circumstances, from us before acting on anything you read.