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Re: LAFHA

Newbie

Views 118

Replies 5

Hi. 
Due to COVID I have had to reside interstate since March and as such my employer has paid me a Living Away From Home Allowance (LAFHA). 
This allowance is paid and displayed on my pay statements UNTAXED however it is included as part of my total gross income on payment summary. 
They are not declaring it as a Fringe Benefit. 

Is the above the correct method for this allowance?

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

Taxicorn

Replies 4

@ChrisSkase 

 

No it is not.

 

If the total between 1st of April 2020 to 30th March 2021 is more than  $2,000 then it would be reported as a Reportable Fringe Benefit.

 

No deductions are possible.

 

https://www.ato.gov.au/law/view/document?DocID=SAV/FBTGEMP/00012&PiT=99991231235958

 

5 REPLIES 5

Most helpful response

Taxicorn

Replies 4

@ChrisSkase 

 

No it is not.

 

If the total between 1st of April 2020 to 30th March 2021 is more than  $2,000 then it would be reported as a Reportable Fringe Benefit.

 

No deductions are possible.

 

https://www.ato.gov.au/law/view/document?DocID=SAV/FBTGEMP/00012&PiT=99991231235958

 

Newbie

Replies 3

Thanks for the reply. 

Is it the fact that my company states on my payslip that the allowance is:

Allowance-LAFHA 

that this means it is a fringe benefit and not part of my gross pay?

If they didn't state LAFHA could it then be deemed otherwise?

Im just trying to understand what they might have done and are continuing to do. 

Community Support

Replies 2

Hi @ChrisSkase,

 

We have answered this previously on our website, you can view our response here. As @ macfanboy has also provided correct information. Please use the link provided, if you still have questions feel free to post them here.

 

All the best.

Newbie

Replies 1

Hi @Jodie2 and @macfanboy.

 

I'm still awaiting a response from my employer as to their reason and understanding on this but they are a large multinational and this don't happen with any time concerns.......

In the meantime I have found this from the Treasury Department:

https://treasury.gov.au/sites/default/files/2019-03/Explanatory_Materials_LAFHA.pdf

 

Has this reform been in acted as it states that a LAFHA should be considered as part of an employee's assessable income, and not a fringe benefit?

I'm having trouble understanding what is actually the correct interpretation on this and my accountant I feel isn't being overly clear on the matter either, plus the fact I can't get an answer from my employer.

 

Community Support

Replies 0

Hi @ChrisSkase,

 

You can view the legal database, information from 1 Oct 2012. It mentions at section 11.3 - If required, report the LAFHA amount as a reportable fringe benefit on the employee's payment summary or income statement (not as a taxable allowance).

 

I have also viewed the information from the link you have provided which seems to conflict with this. As the employer would be guided by the information accessed you may write in to our Early Engagement Team. They can look into legislation and advise you accordingly.

 

All the best.