Living Away from Home Allowance (LAFHA) is a financial benefit provided to individuals who are required to live away from their usual place of residence in order to perform their work duties. As a casual nurse working as a travel nurse doing locums in Australia, understanding LAFHA can help you maximise your income and manage your expenses more effectively. Here’s a comprehensive guide to help you navigate LAFHA:
1. Eligibility Criteria:
To qualify for LAFHA, you must be an Australian resident for tax purposes.
You must be required to live away from your usual place of residence to perform your work duties.
Your assignment must be temporary, with an expectation of duration less than two years.
You must maintain a home in Australia that you are likely to return to after the assignment ends.
2. Documentation:
Keep records of your travel and accommodation expenses incurred while working away from home. This includes receipts for accommodation, meals, and other related expenses.
Maintain a logbook to track your travel dates, work locations, and expenses. This will help support your LAFHA claim in case of an audit.
3. Calculation of LAFHA:
LAFHA is calculated based on the reasonable amount spent on food, accommodation, and other essential living expenses while away from home.
The allowance is tax-free up to certain limits set by the Australian Taxation Office (ATO). Amounts exceeding these limits may be subject to tax.
4. Exclusions:
LAFHA does not cover expenses that are considered extravagant or unrelated to your work duties.
Expenses incurred for the benefit of family members who accompany you on your assignment may not be eligible for LAFHA.
5. Lodging your Claim:
Submit your LAFHA claim to your employer or their designated payroll department.
Provide all necessary documentation to support your claim, including receipts and a logbook of expenses.
Ensure that your claim is lodged within the specified timeframe to avoid delays in processing.
6. Tax Implications:
While LAFHA itself is tax-free up to certain limits, it may impact other aspects of your tax obligations.
Consult with a tax professional to understand how LAFHA affects your overall tax situation, including deductions and potential offsets.
7. Compliance and Reporting:
Ensure that you comply with all relevant tax laws and regulations when claiming LAFHA.
Keep accurate records and be prepared to provide evidence to support your claim in case of an audit by the ATO.
8. Updates and Changes:
Stay informed about any updates or changes to LAFHA regulations that may affect your eligibility or entitlements.
Regularly check the ATO website or consult with your employer for the latest information.
By understanding and effectively managing your Living Away From Home Allowance, you can make the most of your earnings as a casual nurse working as a travel nurse doing locums in Australia. Be proactive in documenting your expenses, stay compliant with tax laws, and seek professional advice when needed to ensure you maximise your entitlements while staying financially responsible.