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Discussion in 'Money & Finance' started by Roy, Apr 2, 2011.

  1. Roy

    Roy Guest

    Hi Everyone!

    Could someone give me a good explanation on LAFHA.
    How it works?
    How much it is?
    How it's worked out ?

    Any help would be great

    Thanks

    Roy
     

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  3. pet1r

    pet1r Guest

    Hi Roy,

    I've just had my LAFHA completed by a really good accountant who sorted everything for me, providing a report to my company and was pretty reasonable considering what he saved me! Bear in mind you should seek your own advice and clarification, I am just passing on to you my understanding in the hope it helps you!

    It's basically salary sacrificing...

    The basics of it are (this is taken from the wording from my accountant)

    ---

    As an expatriate working in Australia you are entitled to a LAFHA to compensate you for the additional cost of accommodation you incur as a result of working away from your usual place of residence. In your case, you have advised your usual place of residence to be in the United Kingdom.

    We have taken into consideration your personal circumstances, life style and home ownership costs in the UK and concluded that your current accommodation cost of $XXX.00 per week are reasonable for LAFHA purposes. Any amount paid in excess of $XXX.0 per week may be a taxable LAFHA fringe benefit and your employer may be liable for FBT.

    You may also be entitled to an additional cost of food component (in your LAFHA) that your family incurs by working away from your usual residence. An amount of $283 per week is your tax free food component of LAFHA. (this is for 2 people)


    [FONT=&quot]You may also be entitled to relocation costs of $X,XXX.XX as a reimbursement. We understand that this will be paid to you as a lump sum at commencement of employment[/FONT]

    ---

    Basically.... they take your whole package ((yearly salary plus Super (pension)) MINUS your rent (12 months), MINUS relocation costs (Flights, removals etc), MINUS the food component (changes per amount of family members).

    Calculate tax on the lower amount calculated above (also calculate your Super on the lower amount).

    This amounts to your take home pay after tax.
    You then add to your take home pay the LAFHA.

    And you are left with a figure that is a little less in your Super BUT a whole lot more in your pocket every month for savings.

    Most employers will pay the relocation costs back to you in a lump sum rather than over the year.

    If they do this, your monthly will be slightly less (because you have been given a lump sum up front) but after 12 months, your monthly will go back up.

    Hope this helps... any questions, feel free to ask.

    Pete.
     
  4. Derek Bryans

    Derek Bryans Guest

    Hi Pete,

    Can you give me the name of your accountant? I need advice on this area also?

    Cheers

    Derek
     
  5. pet1r

    pet1r Guest

    Hi Derek,

    Sure, his name is John Fara and his email is: JFara@fiduciaadvisors.com.au number: [FONT=&quot](+612) 9810 5368.[/FONT]

    He is based in Sydney however; I was recommended him by another friend and he is very attentive and helpful and can do everything remotely.

    [FONT=&quot]if you do use him, Please do tell him that I recommended him to you. (Peter in Brisbane).

    Thanks!
    Pete
    [/FONT]
     
  6. Derek Bryans

    Derek Bryans Guest

    Hi Pete,

    Many thanks. I'm based on Gold Coast, QLD BUT can drop him and email for advise.

    Cheers

    Derek
     

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