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.

Re: Income tax on 457 visa?
 

I think the income tax is pretty:confused: straight forward, but the LAFHA seems to be a nightmare, and as we are wanting to buy house and stay in Oz permanently, we thought we would just leave well alone, and just be grateful that we aren't placed in a higher tax bracket on account of being temp. This is all based on the assumption we can actually get PR:unsure:

Re: Income tax on 457 visa?
 

Sorry, you are so wrong. A 457 Visa is a temp residency so therefore the intention to return is mandated whether you like it or not, irrespective of whether you own in the UK. It is not a grey area at all, it is extremely straightforward but some smaller companies are just scared to talk to the ATO to sort it. The food element is statuted based upon size of family, the rental element is based upon a reasonable rental, i.e a single guy renting a 5 bed penthouse at $2000 a week is NOT reasonable, but that is for the company to moderate. The company suffers no tax liability as the food element is completly no Fringe Benefit Tax and the rental element is taken as essential and all it takes is a decent HR/Mobility Coordinator to set it up and agree it with new migrant employees.

Re: Income tax on 457 visa?
 

Have you asked about LAFHA from your employer? They may be aware of it and if not may be happy to check it out, it really is of no consequence to them financially. It would be worth you claiming it initially while you rent temp accom and until you buy a house, even then you are still eligible for the food element. Until you apply or ask for PR you can claim LAFHA, it is better having the cash in your pocket than the taxmans!

Re: Income tax on 457 visa?
 

So can we still claim LAFHA if we buy a house in Oz?
Have not asked sponsor about it, as I'm not sure really what I'm asking about....didn't want to come across as a big numpty:rofl:

Re: Income tax on 457 visa?
 

You can claim the food element. Don't ask, don't get!!!

Re: Income tax on 457 visa?
 

like I say, don't mind asking if I know what I'm asking for...so whats the food element??

Re: Income tax on 457 visa?
 

Do a search on here for LAFHA, there has been loads of posts on here for it and I even posted a link to the food tables on the ATO website but too tired to search for it myself!!

Re: Income tax on 457 visa?
 

cheers, will have a butchers!

Re: Income tax on 457 visa?
 

Here are the rates!!

http://www.ato.gov.au/businesses/con...tm&page=13&H13

Re: Income tax on 457 visa?
 

I am sorry you think I am wrong. The ATO deals with LAFHA on a case by case basis. Just the fact an employee is on a 457 is not a given they are entitled to a LAFHA.

Re: Income tax on 457 visa?
 

lol.....no need to be sorry!!! But the whole point of being a 457 is that you are only temporary resident, vis a vis Living Away From Home. Therefore ALL 457 visa holders ARE eligible, but, not necessarily all employers are aware or will support that fact! Remember that for an employer to sponsor an employee on a 457 they have to satisfy certain ATO/DIAC/DOE conditions and by satisfying those conditions they automatically make future migrant temporary employees eligible for LAFHA.
Its a pity that this causes so much confusion because it is a valuable source of extra income, for want of a better phrase, to those on a 457. Without it I would not of been able to come over and have my financial obligations met in the UK as well.
A good website to understand all this is the Go Matilda website which has extensive discussions and advice on this. It is run by a ATO registered accountant who is an ex pat himself.

Re: Income tax on 457 visa?
 

All I know is that the tax advisors for my husbands company told us we were not eligible as it is meant to be compensation for working away from home. We did not have a home in the UK so therefore could not argue we were being compensated for being away from it. others in my husbands company are given the LAFHA, the only difference being they have a home to maintain in the UK.

Re: Income tax on 457 visa?
 

I can only comment on our circumstances, NB, but we don't have a house ANYWHERE, the company is viewing it as a permanent move, i.e., relocation was a one-way deal, but it has got us a 457 to get us there quickly, and is arranging a LAFHA for us.

Our original intention was to go for PR ASAP but due to the LAFHA we're going to take advice from a third party tax accountant; it's possible that we'd be better off on the 457 as long as practical (no kids to school).

It sounds possible that you've been badly advised or intentionally misled. :(

Re: Income tax on 457 visa?
 

Possibly although I can't see why they would pay for some employees and not for us. Anyway as it happens we have PR and that was more important to us than any money we could have claimed. The company can still pull the rug from under 457 holders and they would have to leave, no amount of money could compensate us for that.

Re: Income tax on 457 visa?
 

Yup, something we'll have to weigh up - and my original reason for wanting to go straight for PR, as I know from our first few years in Sg (pre-PR) just how insecure you can feel.

Re: Income tax on 457 visa?
 

No, not HAVE to leave...just have to find another sponsor!!! lol
But you was badly advised....it has turned out ok for you but please do not advise others based upon your poor service given to you.

Re: Income tax on 457 visa?
 

You have to find another sponsor and PDQ, dead easy that isn't it ;) I don't think I am advising badly. you find me the paragraph on the ATO website that states that as a 457 holder that you qualify for LAFHA and I will hold my hands up. It isn't there. My husbands company is a global leader in the resource industry, I would say their tax advisors are pretty bob on.

Re: Income tax on 457 visa?
 

Without examining individual circumstances in detail it is very difficult to advise anyone as to whether LAFHA is payable, and I think any poster would be wise to beware of saying that another was given wrong advice.

In the case of someone who is not maintaining a home elsewhere and is intending to apply for PR, it could well be that the employers would not be willing to support a LAFHA payment.

Re: Income tax on 457 visa?
 

OK, as stated the rules on LAFHA are confusing, but everyone who works away from home in Australia is eligible, not just 457 holders. Their tax advisors were either incompetent or lazy. I gave a link earlier to the site which explains it all.

Re: Income tax on 457 visa?
 

No, maintaining a home elsewhere or not has no bearing on LAFHA whatsoever, however, intent to apply for PR is not the same as APPLYING for PR. I may INTEND to apply for PR but until I pursue that avenue I am still eligible for LAFHA. Christ, why does everyone make things difficult here when all people want is a simple answer!

Re: Income tax on 457 visa?
 

No you are wrong, not everyone working away from home in Australia is eligible. If you had read the documentation you would realise that.

To the OP. If your company are willing to offer it, great. If you don't ask you don't get. However despite what Mr Paddo says it is not a foregone conclusion that you are entitled to LAFHA.

Re: Income tax on 457 visa?
 

Because it is an ATO issue, and it isn't simple, numerous threads over the years have shown this.
Maintaining a home elsewhere, as I said, COULD be an issue when deciding on LAFHA. I would seriously advise that anyone looking at claiming it gets independent financial advice from someone familiar with the Aussie tax system; it can be a very complex issue, both for migrans and for Aussies themselves.

Re: Income tax on 457 visa?
 

Thanks Pollyana.
Didn't intend to start a world war 3:unsure:

Re: Income tax on 457 visa?
 

Keeps me in work......trouble is I work on BE from home, wonder if I can claim a LAHAWA (Living At Home And Working Allowance)? :rofl:

Re: Income tax on 457 visa?
 

Don't be a daftie. Like I said, if you don't ask you don't get but don't factor it in, make sure you can afford to come without it because if you want to stay here and get PR you will have to lose it anyway.

Good luck :D