The ‘Living Away from Home Allowances’ is an ATO allowance that is provided to employees as part of a salary package. This gives workers higher take home pay, as a portion of their wage becomes tax free.
LAFHAs are dealt with by specific provisions in tax law (in Division 7 of Part III of the Fringe Benefits Tax Assessment Act 1986 (“FBTAA”).
In order for LAFHA to be available, it must be wholly or partly to compensate an employee for additional non-deductible expenses incurred or compensation for other additional disadvantages to which he or she is subject because they are required to live away from home.
It allows workers to be compensated, who are required to live away from their usual place of residence to work, with an intention of returning home.
Corporate’s and Recruitment Businesses also find it builds staff loyalty and establishes them as an Employer of Choice. Corporate’s and Recruitment Businesses appreciate that it helps them recoup the cost of relocating, in addition to making the most of their entitlements.
While LAFHA offers many benefits, it also involves complex assessments and declarations. This is where Job Capital comes in. We are well versed in the legislation and requirements necessary to ensure compliance.
How we can help.
Every accounting firm may have a slightly different interpretation regarding LAFHA. At Job Capital, we’re a very compliance focused organization. We take a very rigid approach, ensuring all aspects are covered from both a legal and financial perspective.
To find out if you (or your organisation) are eligible for LAFHA, and how we can help, contact the team at Job Capital now.
For more information please visit http://www.ato.gov.au/businesses/content.asp?doc=/content/00199866.htm