Lafha

 

Living Away From Home Allowance (“LAFHA”) in Australia

The LAFHA is an allowance which is..

  • paid directly by an employer to an employee
  • to compensate their additional non-deductible expenses
  • because of a requirement to live away from their usual place of residence to do their job.

LAFHA rates meeting this description are treated as a fringe benefit, but would only be taxable as such if the amounts paid exceed “reasonable” limits.

Fringe benefits tax is paid by the employer, and employees do not directly pay tax on amounts which are subject to FBT. However remuneration package calculations will normally take the FBT impact into account as part of the employer’s total cost, negotiated in combination with the employee’s after-tax value.

Note: the spreadsheet LAFHA calculator that was previously made available here has been withdrawn.

Reasonable Food and Drink Components (per week)

Year To 31 March 2015 2014 2013 2012 2011
Tax Determination TD2014/9 TD2013/4 TD2012/5 TD2011/4 TD2010/4
One Adult $236 $233 $250 $233 $229
Two Adults $354 $250 $400 $373 $367
Three Adults $472 $467 $450 $419 $412
One Adult + One Child $295 $292 $325 $301 $296
Two Adults + One Child $413 $409 $450 $419 $412
Two Adults + Two Children $472 $468 $450 $419 $412
Two Adults + Three Children $531 $527 $524 $488 $480
Three Adults + One Child $531 $526 $524 $488 $480
Three Adults + Two Children $590 $585 $599 $558 $549
Four Adults $590 $584 $599 $558 $549
Additional Adults – each $118 $117 $150 $140 $138
Additional Children – each $59 $59 $75 $68 $67
Children are those aged under 12 at the beginning of the year

 

How FBT applies
What LAFHA is not..
LAFHA Tax exemption

Living Away From Home amounts paid within reasonable limits, do not give rise to a taxable LAFHA fringe benefit and are not taxable in the hands of the employee.

The tax exempt parts of a LAFHA allowance are:

  • Reasonable” accommodation costs; and
  • Reasonable” food costs (see schedule below)
    • less “normal” (statutory) food costs deemed to be $42 per week for adults (12 years old and above), and $21 per week for children (under 12 at the beginning of the year).

Statutory food amounts are set out in the Fringe Benefits Assessment Act.


Reasonable Food Components for 2013-14
Living Away From Home Allowance Declarations
Rule changes from 1 October 2012

Further information:

 

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This page was last modified on 25 June 2014