cbd_bound

I'm heading to Sydney in the new year and currently in talks with HR to finalize my offer. Very excited! However, completely confused with the various options that seem to be available. Admittedly, already anxious and a wee bit scared about the move, so the less worries I have on this front, the better!

The background:

• Will be sponsored on 457 Visa for 2 years
• Offered a base and 9% superannuation

I am apparently eligible for LAFHA but the organization has said I need to apply for it myself and they aren't involved in the process. Is this true?

My understanding of LAFHA is that on the food component, it is already prescribed by ATO based on the number of people in your family. With respect to the rental component, it is your actual rent spent, assuming it is "reasonable".

Also, I've read lost of posts on salary packaging or salary "sacrifice" and wanted to better understand how to approach this with the organization and what I should be asking for. If you had the perfect package, what would you ask for?

I understand I can include superannuation, LAFHA and food to reduce my taxable income. I don't want to miss the boat on this and want to know if this is something I have to process myself or if this is something the organization can (or should) do for me?

Based on what I've read, this doesn't hurt the organization with respect to their costs. It's something that I want to pursue considering the significant financial benefit to me!

Thanks all!

Sherlock Holmes

Hi there and welcome to B.E. I cannot answer your question directly I'm afraid BUT I know that there will be people along shortly who will be able to.

Enjoy you visits here. If you need any assistance about the site itself, feel free to contact me here.

Alistair.

cbd_bound

Thanks Alistair for the warm welcome! Look forward to the big move!

JAJ

And what happens after the 2 years?

Take a look at the following so you know what you are getting into:

http://britishexpats.com/wiki/457_Visa_Restrictions

http://britishexpats.com/wiki/Corpor...tion-Australia

As far as I know, the employer has to do it. And not everyone is eligible, especially if you sell your home overseas.

cbd_bound

Thanks Jaj for the links. More to consider than I had originally envisioned! I very much appreciate the second link as my package isn't quite as impressive as the one outlined in the article.

I intend to go home after 2 years but the reality may be that I become a PR. It will depend on how well the experience goes!

chrissystevo

cbd_bound

I am currently in Brisbane working on a 457 Visa and getting the LAFHA.

You do not have to apply for the LAFHA, as a temporary resident from overseas you are entitled to it. Having said that if asked by the ATO you would have to show that you either have a property still in the UK or family connections which mean that you intend to return at some point.

My employers had never employed anyone from overseas before and took advise from a large accounting firm specialising in tax affairs. Their advise was pretty simple.

Basically I get three different amounts paid into my account. They take my gross fortnightly wage. From this they deduct my rent and pay this amount into my bank. They then deduct a food allowance and pay this into my account (I get 4506 per fortnight as we have 2 children). They then tax me on the balance and pay this into my bank.

My fortnightly pay slip then shows:

Base Hourly $xxxxx
Accomodation Expenses $xxxx
Food Expenses $xxxx
PAYG Withholding $xxxx

As said previously as a temporary employee on a 457 Visathere is no "applying" or forms to fill in, you are automatically entitled to LAFHA.

With regard to Super your employer is legally obliged to pay 9% of your earnings into a Super fund. Some employers take this from your groass wage, most pay it in addition to your gross wage.

Hope that helps and good luck. Feel free to PM me if any of the above doesn't make sense.

Chris

Mr Kilt

Can I just ask what super is? I am waiting on the 457 coming through but about to enter into talks with my company over cold hard cash and need some info for the negotiations

katietops01

Superannuation - your pension paid into a fund of your choice. It is compulsory for your employer to pay 9%, which you may top up if you so wish. You need to be clear on whether your salary includes super, or if it is in addition to the figure they give you.

Mr Kilt

Thanks katietops01, so I currently have a private pension based in the UK. So can I get them to pay into that fund?

ABCDiamond

No. It will be paid into an Australian one, as it is a compulsory government super payment, and they must follow the rules.

ABCDiamond

As far as I am aware the company do not have to offer to help with this.
They do end up getting involved in FBT tax and some employers may want to avoid the hassle, especially if it increases their Fringe Benefit tax payments.

They can of course pay an accountant to do it, but again, they may not wish to pay those fees out.

If an employer already does this for other employers, it will be easy to add another one on, but for a small company, new to LAFHA and FBT, it may be a hassle.

Another point.. LAFHA can be one of two things, and if the employer is unaware of the one you are wanting, they are right in saying they are not involved.

Centrelink: The Living Away From Home Allowance has been set at $1166 for the 2007 ...
this is NOT the one you want.

You want the ATO one

cbd_bound

Hi Chris,

This is great and very helpful. Thanks for sharing your personal example as it will work out very similar for me I suspect!

cbd_bound

Good clarification!