Income tax on 457 visa?
 

Hi,

Conflicting advice on this. Have been reading on BE that on a temporary 457 visa, we get taxed at a higher rate. However have just been looking round the gov. web sites.....
http://www.ato.gov.au/individuals/co...tent/64131.htm

And they seem to say that for tax purposes the term 'residency', is not the same as that used in immigration. So, according to that, we should be taxed as a 'resident', and not have the higher rate, on account of we will have lived and worked in the same place for over 6 months.

Can anyone tell me if i've got this right?????

Much appreciated.
Donna.

Re: Income tax on 457 visa?
 

Have you asked the ATO or a registered tax agent/accountant to clarify?

Re: Income tax on 457 visa?
 

Well, thats where I got this information from, the ATO. But unless you have 6 degrees, it can all sound a bit :curse:
Maybe best to give them a ring direct....if I can find a number:lol:

Re: Income tax on 457 visa?
 

132865...


but who now cares since Nostrdameus reckons we'll all be history by 2012, in the new book.:D

Re: Income tax on 457 visa?
 

Hi, We on 495 visa, got out TFN and stated non resident for tax purposes, meaant taxed at a higher rate, started work and tax form says resident if work for more then 6 months so phoned office, when you do tax return they change your staus and you get tax back.

Re: Income tax on 457 visa?
 

Thanks,
I found this tax tool on the other link
http://calculators.ato.gov.au/script...dent.XR4&go=ok
And having tried different ways, it always comes up with the same answer......Resident.
So am hopeful, and if all else fails, and we have to do the 6 months first, then will try and get it changed after that.:thumbsup:

Re: Income tax on 457 visa?
 

We are in same position ie going out on a 457. You will also qualify for the 'Living away from Home Allowance' (LAFHA) which will give you a bit more money and you will not see these on the tax scales. It is something your Employer will sort out for you. There is some info on this site about LAFHA which may explain it a bit better for you. Good luck with your move, hope it all works out.

Re: Income tax on 457 visa?
 

Just because you are here on a 457 doesn't mean you 'qualify' for LAFHA.

Re: Income tax on 457 visa?
 

You should be taxed as a resident on a 457 from the word go if you are planning a long term stay. Normal rates and bands apply.

Discuss with your company about LAFHA and see if it is offered.

Re: Income tax on 457 visa?
 

This is how now understand it to be.....but I normally get it wrong, so thought I'd ask you guys:thumbsup:

Re: Income tax on 457 visa?
 

Thanks for picking me up on this - I don't live there yet (still in UK) so forgive the naivety. My Employer has stated that I will get it and finance dept will sort it out. Looking around the forum some people have had trouble getting this and sometimes the Employer is unaware of it

Re: Income tax on 457 visa?
 

Like I said even if the employer is aware they don't have to offer it just because you are on a 457. You are lucky to be offered it but be aware that if you make your move look more than a temporary one, ie. buy a home here, sell a home in the UK your allowance may be in jeopardy.

Re: Income tax on 457 visa?
 

OK, 457 is classed as Resident for Tax purposes and has exactly the same rules/rates as all other Residents, no penalties or special exemptions. The LAFHA is applicable to ALL in Australia who are working away from home, this includes a permanent resident who owns a home in Sydney but is working temporarily in Perth for example. LAFHA is allowed all the time it is a temp placement but as soon as you indicate, usually by asking!, that you want permanent residency (for 457) or intend to buy in area (for perms) then the LAFHA stops.
LAFHA is not automatic but all 457's are eligable, its up to them and their prospective employer to engage the ATO to set it up. Some companies are on the ball, some aren't.
So, for the OP, don't worry about suffering tax wise as a 457 resident, but DO try and get LAFHA sorted out, it will reduce your taxable income and thus give you more take home pay.

Re: Income tax on 457 visa?
 

Thanks for clearing that up......will the LAFHA cost the epmployer anything? Ours has not mentioned it and is only a small firm, he has also never sposored before. We feel lucky to have even found a sponsor and don't want to 'push our luck' by asking for more. Also will it be worth it if we intend to buy a house within 6 months anyway as the LAFHA will stop then surely??
Sorry to ask more questions, but you seem to know what your talking about:)
thanks again. Donna.

Re: Income tax on 457 visa?
 

I think it is a bit of a grey area to be honest. This said, my understanding is that the LAFHA is available to individuals who are living away from their "usual place of abode." In other words there has to be an intention to return from whence you came and you are being compensated for being away. If you don't have a residence in the place from whence you came (the UK) it could be argued that you may not intend to return to England, irrespective of your visa category (which doesn't provide for automatic permanent residency). I don't think it is as cut and dry as you are making out hence a lot of employers not willing to offer it as the tax liability is with them and not the individual.