SLC

Hi all,

I've got a proposal for a job I'm due to start at. I'm just trying to figure out the LAHA stuff.

So I get my food allowance and also rent allowance (which is around $1800pm) added to my NET pay.

However in comparison to having pay without LAHA allowance, I only see $600 dollars extra each month.


I guess I need clarification on whether this is actually an allowance, or just tax relief?

ABCDiamond

Normally what happens is that the $1800pm would not be taxed, not given as extra.

eg:

No LAFHA
$6,000 gross pm with tax calculated on $6,000

With LAFHA
$6,000 gross pm but tax calculated on only $4,200 ($6,000 -$1,800)

However, if the employer is paying you the $1800 extra
But you then still pay tax on $6,000

($6,000 used as an example only)