If you have staff who travel for work, we have updated our website with fresh information to assist you decide whether to offer them a travel or a living-away-from-home allowance (LAFHA).
There are a few important distinctions between the two allowances:
A travel allowance must be included as an amount in your employee assessable income and may be subject to tax withholding. It pays for an employee’s lodging, food, and drink, as well as any incidental expenses incurred while away from home overnight to do their tasks.
A LAFHA payment made to an employee may be deemed a LAFHA fringe benefit and must be recorded on your yearly fringe benefits tax (FBT) return. LAFHA is paid to reimburse an employee for additional living expenses incurred if they are compelled to live away from home.
Keep in mind that licenced tax agents and BAS agents can assist you with your taxes.
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