LAFHA

Old Jun 24th 2008, 1:58 pm
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Default LAFHA

Hi,

I have the job and just had 457 visa approved and will be moving to Melbroune around 10th August. Does anyone know how much i can expect to have back towards rent from the LAFHA? Or any suggestions as to where I can find that out would be helpful as we are trying to work out what rent we can afford?

thanks

Claire
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Old Jun 25th 2008, 2:58 am
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Default Re: LAFHA

Originally Posted by clairemoir View Post
Hi,

I have the job and just had 457 visa approved and will be moving to Melbroune around 10th August. Does anyone know how much i can expect to have back towards rent from the LAFHA? Or any suggestions as to where I can find that out would be helpful as we are trying to work out what rent we can afford?

thanks

Claire
Claire, LAFHA has 2 elements, food and accomodation. The food element is set by the ATO and is according to number of adults/children in a household. For example, we are 2 adults and 1 child and our food element is 380 per week. The rental element depends on a few things, the amount agreed with your company, the amount you actually pay in rent and your mininum 457 visa salary.
Your Visa details will tell you your mininum taxable salary for your job and you have to ensure that after LAFHA and any Novated lease you have taken that that figure is met. E.g, if your mininum taxable salary is set at 42k then after all your LAFHA etc is taken off you have 42k left for them to tax. If the amount is lower then your payroll team may decrease your rental LAFHA to ensure you stay above the line.
The amount agreed with by your company is usually the rent you pay unless you decide you want to live in a unreasonably high rental property, at which they may say 'behave'!!
The rent you actually pay is required as proof to your payroll department for them to oversee the rental component.
As an example, I have LAFHA for food and 700 per week rental, I have also got a novated lease car and I JUST manage to stay above the mininum salary bar, if I had gone for a more expensive car then my lafha would of dropped.
At the end of the day, the ATO wants to incite you to come over by giving lafha but also protect itself by saying that you are contributing to the economy!
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Old Jun 26th 2008, 9:17 am
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Default Re: LAFHA

Originally Posted by clairemoir View Post
Hi,
Does anyone know how much i can expect to have back towards rent from the LAFHA?
Claire, Unless you have it writen into your contact, in a word, nil.

To give you a guide though, in Perth I will be getting $456 per week housing plus thirty days settling in allowance in an apartment. The aprtment is paid for directly and we get allowances of $40 per day for me, $36 per day for spouse and $20 per day for each of the children during that time.

Hope it helps
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Old Jun 26th 2008, 9:43 am
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Default Re: LAFHA

Originally Posted by TheRutters View Post
Claire, Unless you have it writen into your contact, in a word, nil.

To give you a guide though, in Perth I will be getting $456 per week housing plus thirty days settling in allowance in an apartment. The aprtment is paid for directly and we get allowances of $40 per day for me, $36 per day for spouse and $20 per day for each of the children during that time.

Hope it helps
Thank you - thats really helpful. Its in my contract that i will get accomodation and food allowance.... so I guess when i arrive i need to speak with HR and check amounts? But thank you again,

Claire
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Old Jun 26th 2008, 10:33 am
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Default Re: LAFHA

Originally Posted by clairemoir View Post
Thank you - thats really helpful. Its in my contract that i will get accomodation and food allowance.... so I guess when i arrive i need to speak with HR and check amounts? But thank you again,

Claire
Nope, you need to speak to HR and sort it before you sign up. You don't have any bargaining position at all once you've signed on the dotted line
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Old Jun 27th 2008, 12:35 am
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Default Re: LAFHA

Originally Posted by TheRutters View Post
Nope, you need to speak to HR and sort it before you sign up. You don't have any bargaining position at all once you've signed on the dotted line
Sorry rutters but you are wrong. The LAFHA amount is not a contractual thing, it is an element of salary that can be offset for tax purposes as long, with a 457, as it does not affect the minimum salary level. It can increase or decrease throughout your term of employment dependant upon the rental component of your accomodation or the taxable salary level.
As long as they have agreed or offered you it then that will suffice, the amounts will be what you claim from your rent plus the food element. For example, my salary package contract confirmed my annual salary plus Super plus any benefits (including the settling in allowance), it did not contain the LAFHA as this can not be worked out until I had actually secured a lease.
If the OP's rent is $400 pw and the food element is $380 pw then the LAFHA will be the monthly combination of them both, roughly $3300, which is the amount taken off salary figures before tax is applied.
The bargaining position is not affected at all.
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Old Jun 27th 2008, 2:49 am
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Default Re: LAFHA

Sorry Paddy, but I can't agree with you there.

The amounts are determined for accomodation by the employer (within 'reasonable limits' moderated by the ATO), hence determining the amounts are their (the employer's) opinion/policy.

The food element is done to a maximum limit, defined by the ATO as the Statutory Food Amount. Over these levels, they attract FBT.

Couple of good links from the ATO as I've had to do research over the last two weeks into this as I'm being moved to Perth:

http://law.ato.gov.au/atolaw/view.ht...TGEMP2%2F00011

http://law.ato.gov.au/atolaw/view.ht...99991231235958

Hence my comment about defining/bargaining the amounts prior to securing the job. The accomodation element is the determination of the employer and therefore the variable you can gain or loose most from.

My company pays substantially differently for assignments in Newcastle, Brisbane and Perth. Corporately, the figures are non-negotiable as they are client paid.

Tim
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Old Jun 27th 2008, 4:10 am
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Default Re: LAFHA

Originally Posted by TheRutters View Post
Sorry Paddy, but I can't agree with you there.

The amounts are determined for accomodation by the employer (within 'reasonable limits' moderated by the ATO), hence determining the amounts are their (the employer's) opinion/policy.

The food element is done to a maximum limit, defined by the ATO as the Statutory Food Amount. Over these levels, they attract FBT.

Couple of good links from the ATO as I've had to do research over the last two weeks into this as I'm being moved to Perth:

http://law.ato.gov.au/atolaw/view.ht...TGEMP2%2F00011

http://law.ato.gov.au/atolaw/view.ht...99991231235958

Hence my comment about defining/bargaining the amounts prior to securing the job. The accomodation element is the determination of the employer and therefore the variable you can gain or loose most from.

My company pays substantially differently for assignments in Newcastle, Brisbane and Perth. Corporately, the figures are non-negotiable as they are client paid.

Tim
I was saying that you were wrong in saying they can not be changed once you sign a contract. Mine was set at $500 as a rough guide prior to coming over here. Then, once I had secured a lease for my $700 apartment, 3 weeks in, I produced that to my HR and they set my LAFHA rental element accordingly. They did not determine the amount, I did by getting that apartment, all they do is ensure it is managed with my salary level. So it can be changed and is a seperate figure from your contract, your contract can state, if it has to, that LAFHA is offered but it will not define the figures as they have differing factors. Your rent may change, your minimum salary level may change, you may have another child, all affect your LAFHA.
The fact that YOUR company sets levels is THEIR and YOUR agreement, mine doesn't and so that is why I based my response. To tell the OP that it HAS to be resolved BEFORE they sign the contract is incorrect advice based only on YOUR agreed job offer and YOUR company standards.
Of course, if the OP is joining your company then you are completely correct!!
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Old Jun 27th 2008, 5:10 am
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Default Re: LAFHA

She'll be right!...lol
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Old Aug 21st 2008, 7:28 pm
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Default Re: LAFHA

MY OH has just received a job offer from a company in Perth and generally everything looks really good with the package. LAFHA wasn’t mentioned so we’ve gone back to the Company and asked the question, the Companies response was “LAFHA is a tax incentive so one needs to meet the criteria as directed by the Australian Tax Office (ATO) to ascertain whether they are eligible – if so, then yes we would include this.”

So where do we go from here?

Do we make sure the LAFHA is mentioned in the Contract and sort out all the details once we get to OZ?

or

Do we get in touch with the ATO now, to see if we are eligible , so all details/values etc are in the agreed Contract?

Any help would be greatly appreciated.

Thanks
Gill
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Old Aug 22nd 2008, 8:23 am
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Default Re: LAFHA

Originally Posted by MacHay View Post
MY OH has just received a job offer from a company in Perth and generally everything looks really good with the package. LAFHA wasn’t mentioned so we’ve gone back to the Company and asked the question, the Companies response was “LAFHA is a tax incentive so one needs to meet the criteria as directed by the Australian Tax Office (ATO) to ascertain whether they are eligible – if so, then yes we would include this.”

So where do we go from here?

Do we make sure the LAFHA is mentioned in the Contract and sort out all the details once we get to OZ?

or

Do we get in touch with the ATO now, to see if we are eligible , so all details/values etc are in the agreed Contract?

Any help would be greatly appreciated.

Thanks
Gill
Eligibility is based upon temporary residency in the first place, if you are coming over on a perm res then you will not get LAFHA.
Secondly, a mininum taxable salary (MTS) level will have been set by the ATO for your particular trade/profession, ostensibly this means that this MUST be your taxable salary after all other fringe benefits and allowances have been accounted for. For example, your MTS is $42500 p.a. and you had a Novated Lease vehicle and LAFHA and those amounts equate to say $55000 p.a., then that means that you would have to earn $97500p.a. as a base package, before Super, to be able to have full LAFHA. If your package was lower then you could still be entitled to LAFHA but the rental element would be reduced to ensure you keep within the MTS level.
All that may not make too much sense unless you have a full breakdown of your salary etc, but, suffice to say, if you can get LAFHA and you are on a temp visa then grab it!!
If their own HR have no experience or knowledge of LAHFA use then it will be complicated only because of their ignorance. It is very common incentive and there will be lots of advice about it. Alan Collett of go matilda dot com might be able to offer a far more eloquent reply than the once I have tried to provide.
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Old Aug 22nd 2008, 8:44 am
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Default Re: LAFHA

Originally Posted by paddyo View Post
Eligibility is based upon temporary residency in the first place, if you are coming over on a perm res then you will not get LAFHA.
Secondly, a mininum taxable salary (MTS) level will have been set by the ATO for your particular trade/profession, ostensibly this means that this MUST be your taxable salary after all other fringe benefits and allowances have been accounted for. For example, your MTS is $42500 p.a. and you had a Novated Lease vehicle and LAFHA and those amounts equate to say $55000 p.a., then that means that you would have to earn $97500p.a. as a base package, before Super, to be able to have full LAFHA. If your package was lower then you could still be entitled to LAFHA but the rental element would be reduced to ensure you keep within the MTS level.
All that may not make too much sense unless you have a full breakdown of your salary etc, but, suffice to say, if you can get LAFHA and you are on a temp visa then grab it!!
If their own HR have no experience or knowledge of LAHFA use then it will be complicated only because of their ignorance. It is very common incentive and there will be lots of advice about it. Alan Collett of go matilda dot com might be able to offer a far more eloquent reply than the once I have tried to provide.
fair play Paddy...

you have given me at least a good understanding of the lafha..

one question though..you said "Your Visa details will tell you your mininum taxable salary for your job"...

my 457 visa has been awarded and we fly out to sydney on the 22nd september..but all i have is a confirmation email from the immigration people to say the visa has been awarded to me and the wife and kid..but it doesnt say anything about my minimum taxable salary...

did you get that info when it was stamped in your passport when you arrived??
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Old Aug 22nd 2008, 8:47 am
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Default Re: LAFHA

Originally Posted by paddyo View Post
Eligibility is based upon temporary residency in the first place, if you are coming over on a perm res then you will not get LAFHA.
Secondly, a mininum taxable salary (MTS) level will have been set by the ATO for your particular trade/profession, ostensibly this means that this MUST be your taxable salary after all other fringe benefits and allowances have been accounted for. For example, your MTS is $42500 p.a. and you had a Novated Lease vehicle and LAFHA and those amounts equate to say $55000 p.a., then that means that you would have to earn $97500p.a. as a base package, before Super, to be able to have full LAFHA. If your package was lower then you could still be entitled to LAFHA but the rental element would be reduced to ensure you keep within the MTS level.
All that may not make too much sense unless you have a full breakdown of your salary etc, but, suffice to say, if you can get LAFHA and you are on a temp visa then grab it!!
If their own HR have no experience or knowledge of LAHFA use then it will be complicated only because of their ignorance. It is very common incentive and there will be lots of advice about it. Alan Collett of go matilda dot com might be able to offer a far more eloquent reply than the once I have tried to provide.
on another point Paddy..you said you have leased a vehicle..we whave been looking at second hand cars on usedcarsales.com.au ..an 06 ford focus (private sale) looks to be about $16000 aussie dollars..did you do a comparison against taking out a loan vs paying a lease on a vehicle?? and..being on a 457 was it difficult to get approval for the lease hire agreement?
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Old Aug 22nd 2008, 9:49 am
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Default Re: LAFHA

Originally Posted by Russ_Sarah View Post
fair play Paddy...

you have given me at least a good understanding of the lafha..

one question though..you said "Your Visa details will tell you your mininum taxable salary for your job"...

my 457 visa has been awarded and we fly out to sydney on the 22nd september..but all i have is a confirmation email from the immigration people to say the visa has been awarded to me and the wife and kid..but it doesnt say anything about my minimum taxable salary...

did you get that info when it was stamped in your passport when you arrived??
Sorry, the details on the Visa response (saying it has been approved) do not show the amounts, they are displayed on the ATO site for each relevant profession. However, the company sponsoring you will know as that will have been part of their responsibility to sponsor you. E.g. my base mininum taxable salary is $42500, which may seem low, but that is my annual salary after ALL other non taxable components have been taken off and LAFHA can take a big chunk off.
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Old Aug 22nd 2008, 9:56 am
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Default Re: LAFHA

Originally Posted by Russ_Sarah View Post
on another point Paddy..you said you have leased a vehicle..we whave been looking at second hand cars on usedcarsales.com.au ..an 06 ford focus (private sale) looks to be about $16000 aussie dollars..did you do a comparison against taking out a loan vs paying a lease on a vehicle?? and..being on a 457 was it difficult to get approval for the lease hire agreement?
As my lease hire is via a company Novated Lease scheme and is thus a benefit tax wise, it was easy for me and my company have a decent set up now. It works out for us cost wise and we chose a 2nd hand over a brand new in order to keep within my salary levels. We have a 2006 Nissan XTrail and costs me $750 dollars out of my salary but is inclusive of EVERYTHING!! Fuel, insurance, tax everything!! I was tempted to get a brand new Honda CRV but at the end of the day, practicality and tax rules pushed us the other way!
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