Mon2soon

hi

I am from the Uk and about to take up a post with a not for profit org in sydney, The organisation i will join said that there is a company which liases with their payroll re: LAFHA but that the paperwork costs $400 to set up which i need to pay apparently other sponsored employees from their organisation have also used this company. I was wondering if anyone had any advise and new if there is a way around thes.

Also can you only get a TFN when in aus as nee dto set one up but seems i can only do it online if i am in australia.

cheers,
r

Bermudashorts

You will need to wait until you are in Australia to apply for the TFN.

Regarding LAFHA, I didn't think people generally pay for it being set up, but companies don't have to administer it and if your new company administers it this way then I don't really see what choice you have.

Icecube

Not sure you should pay for what is only really processing your salary taking account of normal tax deductions and credits. Also not sure what paperwork they refer to?

Maybe best to contact the ATO and ask their opinion on this as it certainly does not sound correct.

NickyC

Not-for-profit organisations are able to provide a lot more perks to their employees that aren't available to 'normal' employers. All sorts of items are able to be deducted from pre-tax incomes which makes up, in some way, for the lower salaries that not-for-profit organisations pay. These extra allowable deductions are common in the health industry.

These schemes are often administered by external specialist companies.

It's more likely to be the the setting up of these extra deductions (as well as LAFHA) that costs. As it's not a money-making enterprise that you'll be working for - it's probably not unreasonable that they want a contribution. You will be benefiting, after all.

You might also find that the fee is tax-deductible

Mon2soon

I did ask about any discounts etc or benefits the company provided but there are none i was told. My boss wrote in an email :

"Basically from my understanding (and a bit of research) you are entitled to Living Away from Home Allowance (LAFHA) – see http://www.easytax.com.au/tax-advice...-allowance/for more details. This is the company that has looked after some of our employees in the past and they understand how to get you the best tax break through this system. You will need to contact them and discuss the way forward. The cost for them to organise the paperwork is about $400 which you would be responsible for. Your easy-tax contact with then liaise with our payroll contact and let her know the details of your LAFHA"

so it seems that I have to pay the $400?

Mon2soon

Icecube

agree that there are a lot more salary sacrifice perks available to these not for profit organisations. However never heard of having to pay for some one to process your salary. Just spoke with my sister in law who is in HR at a NGO who have a similar status and she was equally surprised by the request.

Ask the ATO......

NickyC

That's a shame. Charities and such-like pay a reduced FBT (Fringe Benefits Tax) so are able to offer more generous salary-packaging deals than most. Doesn't sound like yours does, though.

Look on the bright side. You'd probably get the $400 back in your first pay packet.

Mon2soon

I will ask the ATO and see but not really too sure what to say, i have a collegue in syd at the moment who was i think working already for the organsiation on a working holiday visa and now he too is being sponsored and i think they told him the same thing and well dont know this guy so feel i may not be able to make much of a case. I don't know it may be that other companies charge less and this is just one they have used in the past. I understand that someone has to pay for a compnay helping you to do this but a shame the organisation just cant as past of your sponsorship unless there is a way i can do it all myself?

(also on another note does anyone know of any good sites for fiding accomodation have been on easyroom mate but most people want you to pay upfont and kind of want to inspect first so may be looking at finding somewhere temporary at first any suggestions ...) want to be in city as will be working there.
bw
r

Bermudashorts

What has it got to do with ATO?

Companies do not have to administer LAFHA, there seems to be a set up fee if OP wants LAFHA not to go onto payroll. Unusual yes, but if that is what is required it will soon pay for itself.

Mon2soon

another member said to chack with ato? i wasnt sure what they do with this but that was a tip from another member

paddyo

ATO have nothing to do with this, if you call them they will not be able to answer your question.

This is just the LAFHA company charging YOU to set up and organise LAFHA for you via your payroll. It is not unheard of and to be honest, $400 to save potentially $20k a year is not an insurmountable amount to pay.

The OP does not have to do this, but I would suggest that they do so that their life in Oz will be financially more bearable.

Icecube

The reason to contact ATO would be to determine if they could claim the LAFHA with out having to go down the route of paying for an admin service which should be free.

Icecube

Which question do you expect them not to be able to answer? Ability to claim LAFHA and how to do it or that some one is charging $400 to do this service?

NickyC

It's entirely up to the employer what he does. It is not a god-given right to receive LAFHA and the ATO cannot force an employer to offer it.

There IS extra admin involved on the employers side that the employer may or may not want to do. In this case the employer does offer LAFHA but subcontracts the extra administration to another company. There's no law against that - it's no different to paying for any accountant/bookkeeping/payroll service.

In an ideal world the employer would pay the $400 fee but as it's a non-profit organisation and the employer gets nothing from the deal anyway - the only person who benefits is the employee - I don't see that it's too terrible to charge him for it.

Bermudashorts

LAFHA cannot be claimed. It has to be administered by the employer and if this employer requires OP to pay for an external party to set it up then I guess that is what he will have to do.

Or he could refuse on principle and pay the extra tax instead.