Australia's Living Away from Home Allowance (LAFHA) is designed to meet the needs of an employee who must live away from his/her principal place of residence (local, national, international) to fulfil his/her employment responsibilities.

This legislation applies to international employees who are in Australia on a working visa. Accountants interested in taking advantage of this benefit can ascertain their eligibility by contacting the Australian Taxation Office (ATO) http://www.ato.gov.au/  It is worth doing as it can result in significant cost savings and tax concessions for an employee working on contract.

The ATO defines the LAFHA in Section 136 of the Fringe Benefits Tax Assessment Action 1986 as follows: "exempt accommodation component” in relation to a living-away-from-home allowance fringe benefit in relation to an employee of an employer, in relation to a year of tax, means:

1. where the employee gives to the employer, before the declaration date, a declaration, in a form approved by the Commissioner, purporting to set out particulars of: (i)  the employee's usual place of residence during the recipients allowance period; and (ii)  the place at which the employee actually resided during the recipients allowance period; so much (if any) of the recipient's allowance as it would be concluded is in the nature of compensation to the employee for additional expenses that might reasonably be expected to be incurred by the employee in respect of the subsistence during the recipient's allowance period of a lease or licence in respect of a unit of accommodation for the accommodation of eligible family members; or
2. in any other case - nil.

Links:
Tax act interpretation
Brainbox article