Question:

 

Would you please confirm for me if a relocation allowance paid to an employee is a taxable or non taxable allowance

 

Answer:

 

Here is the general rules from IRD:

 

Reimbursing relocation expenses

Any work-related relocation payments you make to your employees are tax free to them if:

• they are relocating to:

   take up employment with a new employer, or

   take up new duties at a new location with you, or

   continuing in their current position, but at a new location, and

• their existing home is not within reasonable daily travelling distance of the new workplace (unless accommodation is provided as an integral part of the job), and
• the expense is on the list of eligible relocation expenses, and
• the payment reflects the actual expenditure incurred, and
• the expenditure is incurred before the end of the tax year following the year they relocate.