Hello,
My name is John and i work in the construction industry. For the last year i have been working in Newcastle while my family lived in Mackay. In this time in have been receiving Living Away From Home Allowance(LAHA) of 450 per week. Ive have been told from a few sources that i can have up to $200 a day taken from my yearly income come tax time. Just wondering if there is any truth in this. Any advice would be greatly apprieciatedIf you are receiving a Living Away from Home allowance your employer will be paying Fringe Benefits Tax and it shoudl not be txaable (or any deductions) as far as you are concerned. If you are being paid a travelling allowance that is a diifferent kettle of fish and the allowance would from part of your income and you would be able to claim deductions against it
Hi John,
I use to work in expatriate tax and would provide advice on LAFHA- this is going back a few years so the law may have changed slightly from then (2004). To be LAFH you generally have to actually move you and your family to a new location for 2 years or more. If the ATO digs deep into your situation you may find that you aren’t actually living away from home, as I assume your return to your principle place of residence every week or so to visit the family. The ATO may therefore deem your LAFHA to be an ordinary allowance and therefore taxable. LAFHA is the only monetary benefit under FBT that is exempt- i.e. your employer doesn’t pay FBT on it. LAFH is determined on a case by case basis- if you aren’t infact LAFH then the LAFHA will be taxed at your marginal rate. Hope this helps.
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