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Staff and Non Staff Reimbursement Procedure

Category Finance
Type Procedure
Approved by Chief Financial Officer
Date Procedure Took Effect 16 April 2002
Last Approved Revision 10 August 2018
Sponsor Chief Financial Officer
Responsible Officer Financial Controller
Review Date 9 February 2020


These procedures relate to the reimbursement of monies by University Staff and Non Staff.


  • Accounts Department - Financial Services Division Accounts Department
  • Finance One - University Corporate Financial System
  • GST - Goods and Services Tax

Policy Content



The University of Otago is required by legislation to be fully accountable. Accountability requirements exist at several levels within the University (internal accountability) and between the University and external parties (external accountability). External parties include the Government, students and the public.

Section 181 of the Education Act sets out the duties of University Councils.

These include (at subsection (e)):
"to ensure that systems are established for the co-ordination of, and accountability for, activities within the institution to ensure the responsible use of public resources".

Section 201 (a) states:
"The Council of an institution - shall cause to be kept proper accounts and records of the transactions and affairs of the institution……"

Internal Controls

In order to achieve this accountability an organisation must have internal controls in place. Internal controls manage risk and help ensure that University resources are used efficiently and effectively. A major component of internal controls is the existence of adequate documentation and records. In the case of reimbursable expenditures, such documentation and records would be GST invoices and receipts.

The University’s external auditors specifically examine all aspects of internal control to ensure that such controls are in place and are adequate.


The University must comply with relevant tax legislation; GST, PAYE and FBT and the Witholding Tax Regulations.

GST – in order for the University to be able claim the GST input tax, there must be an appropriate supporting GST receipt in the form required by the GST Act. Generally this applies to payments which attract GST, made within New Zealand.

How to Claim for Reimbursement

All claims for reimbursements must be made using Finance One.

Reimbursement Processing

After entering and accepting in Finance One, the completed Reimbursement Claim Form must be approved by a higher signing authority. The Financial Delegations Policy does not allow staff members to authorise their own expenditure.

All expenditure must be supported by original receipts, which must be attached to the claim form.

The claim form and supporting documentation should be forwarded to the Accounts Department for checking and posting to Finance One.

All reimbursement payments to University of Otago staff will be direct credited into the bank account held in the University’s payroll system.

Reimbursement payments to non university staff will be made into a bank account. A bank deposit slip must be attached to the Reimbursement Claim Form.

Reimbursements by cheque will only be made in exceptional circumstances, and not on demand.

All claims for reimbursement should be made within one month of the expenditure.

Use of Private Vehicles

Use of Private Vehicles

The University has approved a maximum mileage reimbursement rate of $0.79 per kilometre (km) for the first 3,500kms in one calendar year, for employees who use their private vehicle on University business. This rate applies to all vehicles irrespective of vehicle size and type. The rate will be reviewed periodically.

The mileage reimbursement rate for over 3,500km in a calendar year on University business are set at $0.30 for petrol or diesel vehicles, $0.19 for petrol hybrid vehicles and $0.09 for electric vehicles.

The record keeping of the kilometres reimbursed to a staff member is to be done within the staff members department.

Staff must get approval for the use of their private vehicle in advance. This will ensure that the University insurance cover is available if required.

The reimbursement rate will NOT apply to those staff who have other rates specified in their employment contracts. In these cases the individual’s contract rate will continue to be paid. All other staff should be reimbursed using the most cost effective means i.e. reimbursement of an amount equivalent to the standard airport shuttle service in the staff member’s location.

Senior staff who (under their individual employment contract) are able to claim mileage for travel to the airport are limited to mileage from the University to the airport. From the University clocktower to the airport is 62km return. Mileage from the employee’s house to the University is deemed to be a private expense and if this was to be reimbursed, would be subject to PAYE. If an employee lives between the University and the airport then they can only claim the lesser of the mileage from the University to the airport or the mileage from the employee's house to the airport.

The above rates are the maximum amount that can be paid tax free. Any reimbursement above this rate will be taxable (subject to PAYE) to the employee. Any employee who receives reimbursement under an employment contract or any other arrangement which is more favourable than the above rate will be taxed on that part of the amount which exceeds the above rate. The mechanism for doing this will be to pay the above rate as a cash reimbursement and the additional amount as a taxable allowance via the payroll system.

Any employee who receives reimbursement which is more favourable than the above rates will be taxed on that part of the amount which exceeds the above rate. This also applies in cases where the employee is paid a lump sum in lieu of a mileage claim, for example, where the equivalent of an airfare is paid to an employee as compensation for the use of their private vehicle. Such a payment will be required to be treated as a mileage claim subject to the rules outlined above.

The reimbursement of private vehicle costs should not be made using petty cash.

Travel Costs

Reimbursement of work related travel costs should be calculated using the most cost effective means for the University. This should be calculated by using either the cheapest equivalent airfare, hiring a rental car, using the standard airport shuttle service or reimbursing the staff member for mileage. Any reimbursement above these options will be taxable (subject to PAYE) in the hands of the employee. In accordance with University policy, personal credit cards should not be used to pay for business related travel.

Conference Leave/Research Leave and Study Leave

Expenses paid or reimbursed by the University for Conference Leave or Research and Study Leave must be work related and contain no element of private expenditure to avoid a taxation liability.

To avoid a taxation liability, costs related to family members accompanying the employee should be treated as follows:

  • Where the leave is less than one month - family travel and related costs are not an acceptable business expense unless the family member is involved in the study or research activity.
  • Leave from one month to six months - family travel and related costs may be an acceptable business expense depending on the nature of the leave. For advice, see the departmental administrator or Financial Analyst.
  • Leave in excess of six months - family travel and related costs would be an acceptable business expense in most cases.

Related Policies, Procedures and Forms

Contact for Further Information

For further information, contact the Financial Controller, extn 9247 or email