If the thought of moving away from home to take up a contract is too expensive to consider, think again – you may be entitled to a Living Away From Home Allowance (LAFHA).
A LAFHA is an allowance that’s approved by the Australian Taxation Office and paid directly by your employer. And, as long as your contract keeps you away for a minimum of 21 days and a maximum of 12 months, and you retain access to your residential home, you’ll be well on your way to meeting Federal Government requirements.
There are two generous primary components to a LAFHA: a food allowance and an accommodation allowance. On top of the LAFHA, it may be possible to claim the cost of travelling to your new place of employment, to have your household items packed, removed from your residential home and stored. In addition, temporary accommodation for up to four weeks while you’re waiting on long term housing to become available. An allowance may also be possible to cover the cost of connection to utilities such as gas, electricity, and the NBN.
LAFHAs are income-tax-free, so you won’t need to include any of these allowances as part of your assessable income in your tax return. On the other hand, you should note that you will not be able to claim a deduction for any expenses covered by your LAFHA either.
To find out more about whether you’re eligible for a LAFHA, or for assistance to meet your obligations as a contractor, contact an expert from the Ayers Group today. We’ve been helping contractors to grow their business and their wealth with tailored contractor management services for over 20 years.
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