Hi all,

I have a few questions regarding the tax issues related to a 457 visa. I am moving to Sydney in Feb, but not being transferred from the UK (eg, I've quit my job here and taken a job with a Sydney firm). Coming in on the temp 457 visa, and don't yet know whether it will lead to permanent status (depends on my and company's views). Is LAFHA still relevant in this case?? Given I am being employed by an Aussie firm, will I be seen as a permanent employee in this matter?

Also, I have been told that the temp visa carries advantageous tax benefits (eg lower tax rate), but can't find anything to back this up. Can anyone help???

Final Q, is 9% super deducted from salary (as stated in offer) pre-tax or is this done by employer outside my view??

Thanks in advance

Viking1

Hi Viking,

I came to Sydney on a 457 visa similar to you.

LAFHA will be applicable providing your company agrees to do it for you. (Get them to commit to it in your job offer). It is extremely beneficial to have - we really miss it !

You are eligible for LAFHA as long as you are a temporary resident as you essentially will have to return to the UK at the end of the visa. However once you have instigated plans to stay in Oz permanently (ie lodged application to DIMIA), you must stop claiming LAFHA.

As for tax rates, I am afraid temp residents are considered residents for taxation purposes and therefore are taxed at the same rate as everyone else.

As for super, I think how it is represented differently by different employers. In my case all my pay rates have always been expressed as an hourly amount + super. I get taxed on the hourly amount, the super amount is not even mentioned on my pay-slip. So that would lead me to deduce that super contributions are tax-exempt. I should add that I am no expert - please verify this with your new employer.