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Many workplaces require their employees to drive as part of their work, whether they are driving a company car or their own vehicle. This can raise questions around what your obligations are as an employer, such as whether you need to pay for your employees petrol. While you may not need to meet the ongoing costs of your worker’s car, there are certain responsibilities as an employer with workers who are driving during work. This article sets out: 

  • what your obligations are; and 
  • the special rules for employers with young employees.

Do I Need To Meet Petrol and Other Costs Of Employees Driving?

You are not legally responsible for meeting any specific costs incurred by your employees whilst driving their own car for work purposes, including petrol costs. However, it is best practice to do so. Therefore, many employers arrange a system for compensating employees who incur petrol and other costs while driving for work. 

In general, you should set out these arrangements in an agreement between you and the employee, either through: 

If an employee is going to use their own vehicle when doing their work duties, you and the employee should agree to this as part of the employment agreement. No matter whether your employee is using their own car for work purposes or a vehicle that you own, you still owe certain responsibilities. However, you are not legally obliged to pay for specific petrol costs.

There is a general societal sentiment that you should pay your employees a vehicle or fuel allowance, depending on the amount of driving they must do during the work day. There are some different ways of making these arrangements work. 

For instance, in some agricultural workplaces like farms, employers provide the fuel directly for employees to use, rather than by reimbursement. Other employers and employees agree that the employer will help with other vehicle-related costs, such as: 

  • registration; and 
  • warrant of fitness.

Another thing you may want to consider is whether to provide parking to employees who are driving as part of their job. There is no legal obligation here to provide parking, but it can either be: 

  • a perk provided to staff; or 
  • provided as part of a salary package by way of salary deduction, with the written agreement of the employee.

What Are My Obligations to Employees Who Drive as Part of Their Work?

While you do not necessarily need to meet the ongoing costs of workers who are driving a vehicle (whether their own or a business car) as part of their role, there are a set of obligations you owe in that context. Employers owe a responsibility under health and safety law to ensure the health and safety of employees while they are at work. This includes when they are in, or operating a vehicle for work purposes. 

You also must also make sure that all employees are trained and supervised so that they can do their work duties safely. This means making sure that any vehicle used for work purposes is:

  • roadworthy and warranted;
  • adequately and appropriately insured; and
  • only used within its specified capability. 

You should also ensure that any of your employers who are driving vehicles for work purposes:

  • have the appropriate driver’s licence class for the vehicle they are driving;
  • can drive effectively at the time, for example, not being fatigued or under the influence of alcohol or drugs;
  • comply with driving hours restrictions for heavy vehicles;
  • comply with the conditions of their driving licence, for example, wearing glasses when they are required to do so;
  • have enough time to do the task safely; and
  • are physically capable of doing the task.

Specific Rules for Young Workers Who Are Driving

It is worth noting that if you have younger workers, there are specific rules and requirements around driving. These are also relevant if you are hiring contractors. It is your responsibility to ensure that any workers that are under 15 years old do not: 

  • drive a tractor; 
  • ride on any vehicle when it is towing something else or is attached to anything; or
  • ride on anything towed by or attached to any vehicle.

There is a special exception for businesses in the agricultural sector. If a young person over the age of 12 is working for you and doing contract work, they can use tractors for agricultural work where they are:

  • being trained; or 
  • on the property.

Key Takeaways

You do not legally have to pay for petrol and other ongoing costs for your employees who drive as part of their duties. However, many employers come to arrangements with their employees to compensate them for those costs. You should formally record these arrangements either in a policy or employment agreement. You must also ensure that you are meeting your health and safety obligations with respect to any employers driving a vehicle for work. If you have any questions about how to manage employee vehicle expenses and issues in your business, contact LegalVision’s New Zealand employment lawyers on 0800 005 570 or complete the form on this page.


Do I need to pay for petrol for my employees?

No, there is no legal requirement to do so. However, many employers compensate their employees for those expenses. 

Are employees obligated to a carpark if they are required to drive as part of their job?

No, they are not. However, it may be helpful for your business’ productivity to ensure employees can access the vehicle they need throughout the day.

What do I need to check about my employee’s car they are using for work?

You should ensure that your employee’s vehicle is roadworthy and warranted, adequately and appropriately insured, and only used within its specified capability.

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