Hi

I am currently residing in the UK and have been offered a job to work in Australia. My sponsor will be paying me LAFHA.

I am trying to calculate, approximately, what my net pay would be if I had a package of say $A50000 per annum with $A35000 being the base salary and $A15000 being LAFHA.

What is confusing me is:

• the wording in the offer says that LAFHA is taxable. As far as I understand, this is a Fringe tax that the employer has to pay so does that mean I just calculate tax on my base salary?;
  
• If I am not tax exempted from the LAFHA, how do I calculate the tax I would have to pay on it - is it simply tax on (base salary + LAFHA) or is there a different rate for LAFHA?

Thanks in advance.

LAFHA should be tax free.

What my employers did was pay me an hourly rate and then deduct the LAFHA amount from that before calculating the tax to be witheld. Si in your case the $15,000 will be tax free and you will pay tax on the $35,000.

Tax on $35,000 would be $6375 including medicare levy.

So your nett income would be approx $43,625 including LAHFA ($839 per week).

ColinHanna, thanks for the information.

Hi,

Can anybody tell me how employer calculates the LAFHA amount. I am being paid $65 as Rent and $164 as Food component. I am not sure how is it calculated. My pay package is $55k excluding this LAFHA amount.

Regards,
Robin

quote:

Originally posted by Robin_Batra:
Hi,

Can anybody tell me how employer calculates the LAFHA amount. I am being paid $65 as Rent and $164 as Food component. I am not sure how is it calculated. Regards,
Robin

G'day

It is not calculated. It is negotiated. If $229 is what you negotiated, then that's what it is.

Cheers
Bob in Bull Creek

quote:

Originally posted by Rupen:
... if I had a package of say $A50000 per annum with $A35000 being the base salary and $A15000 being LAFHA.

G'day

Presumably you're looking at coming on a temporary visa of some sort (457?). There are legislated minimum salaries based upon your occupation and your location.

So, if you're an Information and Communication Technology worker going to a non remote location, your salary must be $57,300 or higher. Any other benefits in your package such as LAFHA, super, salary packaging must be on top of that base salary amount.

Cheers
Bob in Bull Creek

I have been offered a jod in melbourne but i have not come across LAFHA. What is it??

Are you coming to Oz as a temporary resident under a 457 visa ?

LAFHA is Living Away From Home Allowance and is a way of reducing the amount of tax you pay by claiming your living expenses (rent and food) as a tax-free deduction. Basically this allowance is deducted from your salary prior to tax being calculated and then you are paid the allowance as a tax-free expense.

However it MUST be administered by your employer and MUST be part of your contract of employment. And it only applies to people coming here as temporary residents - once you apply to become a permanent resident you cannot claim it anymore as it is no longer your intention to return home.