BASIS OF NEW TAX

Southland Times, Issue 23768, 16 March 1939, Page 4

BASIS OF NEW TAX

LEVY ON BOARD AND LODGING DOMESTIC WORKERS TO PAY Contributions under the Social Security Act, which are to be made from April 1, are based on a charge of 1/- in the £l, not only on wages, salaries and other income, but also on the value of other benefits, such as board, lodging or the use of a house, given in the course of employment. Domestic workers in private . homes, hotels or boarding houses, certain other classes of hotel workers', nurses, seamen, and also rural workers who are given board or lodging or its equivalent, are particularly affected by the embracing nature of the charge, says The New Zealand Herald.

The provision in the Act relating to the imposition of the charge on “other benefits” is contained in section 118 (2), which reads: “Where any person, in respect of his employment or service, is provided with board or lodging or the use of a house, or any other benefits in kind whatsoever, the value of such benefits shall, for the purposes of this part of the Act, be deemed, to Le salary or wages, and the charge in respect thereof shall be payable from time to time as the charge becomes payable in respect of that part of his salary or wages as is payable in money.” DEDUCTIONS FROM SALARIES In applying this provision, the employer will make the appropriate deductions from wages or salaries and cancel the necessary social security stamps in the same manner as he will for cash wages. The value of board and lodging is assessed in some industrial awards and agreements, and also in regulations issued under the Agricultural Workers’ Act. No method of assessment so far exists, however, for certain other classes of workers affected. Domestic workers in private homes escaped unemployment taxation, but are liable for social security tax. Inquiry from the Commissioner of Taxes, Wellington, elicited the information that the department has not yet determined the manner in which the value of board and lodging given to private domestics is to be assessed. This question will doubtless be made the subject of a departmental or ministerial statement later. It was also stated that the value of meals given to domestics who worked by the day and were not given lodging would have to be taken into consideration in deducting! the amount of employment tax. ALLOWANCES UNDER AWARDS If the department assesses board and lodging on the scale provided in awards and agreements covering workers in licensed and private hotels and board-ing-houses, it may exceed the cash value of wages received by some domestics in private homes, who, because of age or disabilities are employed at a fairly nominal remuneration. The awards referred to provide for a lodging allowance of 10/- and boarding allowance of 20/- a week, or the equivalent in cash. There is also provision that on a worker’s day off, meals will be provided, or 3/- paid in cash. The social security assessment " for workers under the awards will therefore be based on 33/- a week before cash wages. Restaurant workers must be provided under their awards with two substantial meals each full working day, and one meal on the half-day, the cash equivalent of a meal being assessed at 1/-. Such workers will therefore pay taxation on 11/- a week above their wages. Where houses are provided for workers, the equivalent rental value will have to be determined ,the Commissioner under the Act being the arbiter in the case of any dispute.