ThomThom

i am approahing the end of my visa apps and am curious to know how and when a LAFHA is calculated. it does say on my contract that i get one but nothing as yet has been specified by my employer. does anyone know ruffly how much your entitled too? and also how it is actually calculated? if it helps - my job is in recruitent and based in sydney - i know its kind of based on extra expences of LAFH but at present im living at home paying no rent as im saving - would that matter???

thanks guys, any help much appreciated

smurtaza

LAHFA is processed only by employer whenever you get paid.LAHFA depends upon your rent and meal allowance.

ThomThom

so my employer tells me what im going to get? and its based on local living prices - any ideas how this is calculated though?

Jasonmb

Hi, I Thought it was a tax incentive and you didn't pay as much tax on a portion of your salary. Has your contract not specificed how much you will get paid and what portion will be eligable for LAFHA, if it doesn't, ask your employer and they should be abel to assist. Do a search on here, there have been loads of threads about this.

worzel

I think you may be thinking of RAHTA?

At my company LAFHA basically gives you the cost of airfares and accommodation for the whole family back from out bush to a city twice per year. It is more complicated than that (eg you can still get something if you choose to do a road trip) but you get the idea?

Jasonmb

Hi, some companies may use LAFHA in different ways. My total remuneration will include a Living Away From Home Allowance (LAFHA) component to compensate me for the additional costs and other disadvantages to which I may be subject to whilst living away from my home.

This will consist of:
a) a housing component to cover housing costs (to be determined based on actual rental expenses incurred), and
b ) a food component to cover additional food costs in excess of $42 per week, based on prescribed Australian Taxation Office rates.

worzel

Yes, I wasn't suggesting LAFHA was the only thing going for living away from the cities. We pay a 30% premium to people in Karratha, 35% for Tom Price, Newman, Paraburdoo etc. Accommodation is subsidised so that rents are about half what they are in the city and then utilities are also subsidised by about 50%. Against that you get the papers a day late and petrol is about 30% more expensive etc. Non-financially, you live in a friendly / safe environment like the 50's in the UK on TV where everyone knows everyone else and you don't need to lock your house / car. Can you tell I am tempted to give it a go?

smurtaza

Its called per Diem in US......In Australia its less as compared with US.

worzel

Per diem (when I had it in the UK) was a daily allowance for meals etc when travelling rather than claiming against receipts. That is different to benefits to lure people to live and work in the bush.

jayr

LAFHA (for expats) is intended to cover costs associated with living away from normal place of work. I believe you need to be on a Temporary Visa to get it (as a Permanent visa implies, well permancy).

There are two components, one for housing and one for food.

You will need to be RENTING to get the housing allowance. You will typically tell your employer what your annual rent is (say $20,000) and they will then pay that part of your salary free of income tax.

lets say your marginal income tax rate is 30%. By getting LAFHA (rent component) on a $20,000 annual rent you are saving $6000 a year in income tax - you take home pay is therefore $500/month higher.

The food component is a fixed amount based on the number of people in the household. I cant remember the number but I'm sure I was about $5000/year better off with that component.

Basically LAFHA is likley to make you better off by around $750/month.

You MUST be on temporary visa and be renting.
You will have to provide your rental agreement to your employer as evidence and you will annually have to sign a declaration including your (current) temporary address and your original permanent address.
You DO NOT have to in any way maintain an actual address elsewhere (by owning a home or renting a home); use your parents address if necessary

Stu Ward

Does the company you work for pay the tax differential, or does the Australian government give you the tax relief ?

Stu

paddyo

Bang on old chap!!!

The food rate is fixed, e.g. for a family of 2 adults and 1 child it is $340 pw at the moment. The amount for rent is agreed/negotiated/determined between yourself and your employer PRIOR to starting employment and is only for those on temporary visa e.g. 457 like me!!

northernbird

Don't forget also its not allowance that you automatically get if you come on a 457 visa. It forms part of the fringe benefits tax and not all employers offer it. You can't just land and claim it.

louemm

so is it an incentive by the government or an employer??

northernbird

All I know is that it isn't a god given right as a temporary visa holder and that it should be negotiated as part of your contract. Not all employers can be bothered with it as buck stops with them as far as the tax liability to the ATO.