Discussion
LAFHA is a tax break for while you're temporarily living and working in Aus away from your normal place/country of residence.
Its made up of an amount for rental allowance and an amount for a food allowance, based on the number of people and the city you live.
Im on a 457 visa and my company does all the paperwork for the tax office for me to claim the LAFHA. Basically, a certain amount of your salary is tax free. However, there is a minimum taxable wage, I think its about AU$47,000 a year.
Not all companies do it, only because its hard/extra work for the payroll dept. but
HTH
Jamie
Its made up of an amount for rental allowance and an amount for a food allowance, based on the number of people and the city you live.
Im on a 457 visa and my company does all the paperwork for the tax office for me to claim the LAFHA. Basically, a certain amount of your salary is tax free. However, there is a minimum taxable wage, I think its about AU$47,000 a year.
Not all companies do it, only because its hard/extra work for the payroll dept. but
HTH
Jamie
If your employer is willing to offer the living away from home allowance, I would grab in with both hands.
As a temporary worker, you pay the same tax as everyone else, but get none of the benefits back. I have heard from some people, the LAFHA can be worth $5000 - $6000 in your pocket. Obviously, subject to individual circumstances.
As a temporary worker, you pay the same tax as everyone else, but get none of the benefits back. I have heard from some people, the LAFHA can be worth $5000 - $6000 in your pocket. Obviously, subject to individual circumstances.
I've been claiming LAFHA for over 3 years now and it's great.
All of your rent and a set food allowance ($300 a week for a family of 4) is then tax free. If you're in the 40 - 50% tax bracket, it adds up.
There's other benefits if you look a bit closer as well. Furniture rental, school fees and even flights for all those listed on your visa back to your home country once a year can be added (or partially added).
You can only claim it for 4 years though and if at any time you decide to apply for residency, your intent has changed and you will lose the LAFHA.
This is the reason we haven't applied for residency yet. The LAFHA is worth $1000 a month in my pocket. Once the UK housing market picks up, I'll sell up and apply for residency here so that I can get a mortgage. Until then, we'll continue on as temporary residents.
All of your rent and a set food allowance ($300 a week for a family of 4) is then tax free. If you're in the 40 - 50% tax bracket, it adds up.
There's other benefits if you look a bit closer as well. Furniture rental, school fees and even flights for all those listed on your visa back to your home country once a year can be added (or partially added).
You can only claim it for 4 years though and if at any time you decide to apply for residency, your intent has changed and you will lose the LAFHA.
This is the reason we haven't applied for residency yet. The LAFHA is worth $1000 a month in my pocket. Once the UK housing market picks up, I'll sell up and apply for residency here so that I can get a mortgage. Until then, we'll continue on as temporary residents.
Thanks for that, looks like I'm lucky as my employer is sorting out all the details.
I did some rough workings out and it does look like being worth about $1k a month which is great news.
Question though, do you have to have a house back in the UK (rented out), you can't have sold it or have been renting your self?
I did some rough workings out and it does look like being worth about $1k a month which is great news.
Question though, do you have to have a house back in the UK (rented out), you can't have sold it or have been renting your self?
Edited by custardtart on Thursday 24th September 16:33
We rent ours out, in fact it adds to your case that you are working away from home that you still own your home in the UK.
I would check that your company is also providing healthcare for you and all your family, ours does. Otherwise you'll need to take out some kind of insurance policy. When you move over make sure that you check all your costs, we had a relocation consultant who has come in with a bill which defies belief.
I would check that your company is also providing healthcare for you and all your family, ours does. Otherwise you'll need to take out some kind of insurance policy. When you move over make sure that you check all your costs, we had a relocation consultant who has come in with a bill which defies belief.
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