Gross Earnings
About the Author:
Paul Wilton (editor)
CA with degrees in commerce, accounting and information technology. Paul worked overseas in the “Big 4” accounting firms and served as a director at Audit New Zealand before setting up his own consultancy. Author of A-Z of New Zealand Business Law, Paul has over 20 years of experience as a business owner and consultant. He joined FBA in 2004 and is totally committed to providing excellence in quality and value to our subscribers.
Included in Gross Earnings
Gross earnings include (but are not limited to):
salary and wages
allowances (excluding reimbursement allowances
all overtime
piece rates
most incentive and reward payments including bonuses, commissions, productivity and performance payments
payment for annual holidays and public holidays
payment for sick and bereavement leave
the cash value of board and lodgings supplied by the employer
the first week's ACC compensation paid by the employer.
Also, if an employment agreement states that a payment is included in gross earnings, then it must be included even if that type of payment would not usually be included.
Not Included in Gross Earnings
Gross earnings do not generally include:
reimbursements for costs incurred by an employee on behalf of the employer
weekly ACC compensation payments that the employer doesn’t have to make
leave payments when an employee is on volunteers leave for military service
payment for annual holidays that have been cashed out and not taken as leave. This is limited to one week of cashed out leave per entitlement year
any payments that the employer is not bound, by the terms of the employee’s employment agreement, to pay the employee. These payments must be genuinely discretionary, so are likely to be rare
redundancy payments.
If it is unclear whether a payment should be included in gross earnings, it is recommended that you err on the side of caution and include the payment, unless you obtain legal advice to the contrary. For example: Employee share benefits may or may not be included in gross earnings, depending on their specific nature.
FBA Editor
The legal distinction between a contractor and employee is changing. Recently there have been a number of significant Employment Court decisions shaping the law in this area.