sanyoman

Hello,
I am hoping that someone out there can help me urgently because I have a job offer which I need to sign really soon and can't.
I've been in Oz for a year now working under a 457. My existing arrangement as a contractor is nice any easy - or it was to set up. I get a fixed rate and receive LAFH allowance which is a very good chunk of my monthly salary.
I've since been offered a permanent job - so no more contracting. It's a good deal but I am really struggling to work out how much I am going to be taking home. The offer has been presented to me like a normal Ozzie with no additional calculations added for LAFH.
I'll assume that I am still eligible for LAFH as my circumstance hasn't changed - still renting here in Oz - still have family and property in the UK.
My company isn't really helping me out here - HR aren't any help and Payroll can't offer advise so I really feel stuck.
If someone out there can help me I'd really appreciate it... He is what I think I know.
How this works for me right now is that out of the money the company pays, a portion shows up on my payment advice as LAFH. This leave a chunk which show up as salary and is therefore taxed. The total of the Salary Portion and the LAFH make up the agreed rate. The LAFH portion is not taxed.
Given that this is the case I'd expect that the LAFH allowance per month is deducted from the Gross figure and then I am only taxed on the lump that is left. This in turn means I am effectively earning less and therefore paying much less tax overall.
How does that sound - right or wrong?

Also, I need to know what to say to them to ensure the LAFH is included in the package - don't I? There is a different problem here because I don't think they will assess me until after I sign.

Any comments are welcome.

Thanks in advance

Sanyoman

Luke I Amyofath

sorry cant help but maybe try the immigration forum

jjonboy

Lahfa HAS to be administered by your employer. If you are not able to educate them on it hten you won't get it, simple as that. You will need to eithier talk them into paying it or up the gross amount to compensate.

Presumably at some point you will choose or be forced to apply for PR and LAFHA becomes history at that point also.....

www.ato.gov.au will tell you how much you will take home from your pay each pay period.

JJonboy

Bix

My opinion:-
This sounds all wrong to me.
The terms of a 457 do not allow you to change jobs.
If your visa was granted on a contractors job it has to stay that for the duration of the visa.
If they wish to offer you a permanent position they should sponsor you for a PR visa or at least get the anticipated change in status approved in advance by DIMIA.

Either way if you are on a 457 visa LAFHA can be available.

Sandra

Agree the terms of a 457 do not allow you personally to change jobs to another company, but the sponsoring company can offer you a new role or different terms and conditions and can offer to hire you on a perm basis within your 457 visa. The big difference is if you are staying with a company who now say the 457 is no longer valid and you have to switch to a perm with them offering ER Nomination, then the LAFHA is in doubt.

The minute an application for perm residency is submitted you are no longer able to claim LAFHA and all your income becomes taxable as you say. You do need to negotiate this into your package.

eg 100K with 20K inclusive LAFHA means only 80K is taxable, change without a new salary package and you will be earning less from the point of application.

For a basic calc, anything over 95K earned as LAFHA you need to double into basic, watch out for super (pension) and other employer on costs.

Have fun

sanyoman

Thanks for you the replies. Just to clarify they are offering me a "full time" position not contract and they are going to re-sponsor me (or change over the 457 for them).

Cheers

Sanyoman