munchkinpie Posted February 16, 2011 Share Posted February 16, 2011 Hi All Could any one please help with some figures and info please. We have been going round in circles since Friday trying to get our heads round figures etc and we are now going crazy! My other half has the contract sitting waiting to be signed and emailed back asap as he has start date 28 March. The company has all its parts in place for the 457 so its just his part. I have copied in the details - Base: $60,000 LAFHA: $25,000 (estimate only) Together Figure: $85,000 Super:$5,400 Total Remuneration: $90,400 Please note that the LAFHA amount is only an estimate and is based on your rental payments. Therefore if your rental payments are less than this, then your base will increase to ensure that your "together figure" always remains unchanged at $85,000. What we are struggling to get clarified is that 1) we believe that the LAFHA is a tax break and shouldnt be put to you as if its salary - is that not right? 2) When we questioned them about Figures we ask what figure we would be using to declare to say Bank/Mortgage etc if it came to it as we feel it should be the base figure but they are adamant it should be the Together figure. 3) Because of the confusion I cant do calculations as I cant decide which is taxable etc Would really appreciate any input and advice anyone has. Many Thanks Louise xx Link to comment Share on other sites More sharing options...
Guest MonsterMunch Posted February 17, 2011 Share Posted February 17, 2011 I've not seen it positioned as "Together Figure" before... I guess they are just trying to state that they will administer LAFHA (not all companies do). It looks like the base salary is $85k, and I'd be asking them to confirm that more than anything. Link to comment Share on other sites More sharing options...
Guest Liam Posted February 17, 2011 Share Posted February 17, 2011 Hi LAFHA is away of taking some of your salary by way of payments for Housing and Living costs while you qualify as Living away from Home. So what your company is saying is that they are offerring you a Salary of $85,000 but instead of being taxed on it as a normal worker, they have allowed for $25,000 to be atributted to Rent and Food under the LAFHA rules and hence you will pay a lot less tax on this portion than a normal worker. Its important that you know that your Package is $85K plus Superannaution as if for any reaosn you stay on and become a permananet resident or citizen the this is your BASE. 2) They are right and you should use the together figure for assessing mortgage qualification etc 3) Just know that your $65K Base is taxed at marginal tax rates Tax rates 2010–11 Taxable income Tax on this income 0 – $6,000 Nil $6,001 – $37,000 - 15c for each $1 over $6,000 $37,001 – $80,000 - $4,650 plus 30c for each $1 over $37,000 $80,001 – $180,000 - $17,550 plus 37c for each $1 over $80,000 The $25,000 under the LAFHA Scheme will be not be taxed as long as it is reasonable. So as a general guide you are saving 31.5% tax on that $25,000. It may not be exactly this much and you should speak to an accountant but this is a good guide. LAHFA is DEFINTELY WORTH GETTING Hope this helps Liam Link to comment Share on other sites More sharing options...
Parley Posted February 17, 2011 Share Posted February 17, 2011 I would definitely include the together figure as income when applying for the loan. On the mortgage application they will ask about household expenses so you really need to show the full income. Link to comment Share on other sites More sharing options...
Guest CandS Posted February 17, 2011 Share Posted February 17, 2011 From the figures they're giving you it seems they are only paying the 9% super on the $60,000, rather than the total package of $85,000, which seems wrong to me. The offer I have certainly doesn't work that way. Also, LAFHA is a tax break you apply for and the company cannot guarantee that you will get it. What will they pay you if it is declined? Link to comment Share on other sites More sharing options...
Guest Toorak Trev Posted February 17, 2011 Share Posted February 17, 2011 Interesting on what becomes of LAFHA when you apply for a home loan:biggrin: Link to comment Share on other sites More sharing options...
munchkinpie Posted February 17, 2011 Author Share Posted February 17, 2011 Thank you everyone. After another sleepless night and early morning phonecall (what a difference it can make speaking and listening to someone different) they have said: 1) the company already has many employees with whom LAFHA is applicable and they receive it etc and they use the Total Renumeration figure as their declared salary 2) the salary wont equate to less than $85k but exact figures are dependant on the actual rental costs when accomodation is found. Max allowance for the rent for the year would be $25k. Rent and Super I can calculate when I have rental cost etc ie If rent works out cheaper - say $22k then taxable amount would be $63k 6k @ 0 Tax 31K @ 15c per $1 = $4650 26K @ 30c per $1 = $7800 so $12,450 tax on the $63,000 = Take Home of $50550 (roughly $4212 per month) Super @9% on $63k = $5670 Oh dear my head is spinning!! Thank goodness Im sending Mr out on his own initially to get a feel for the place etc (plus show how good he is lol and get more $$ as its a bit salary drop when exchanging at the recommended 2.2 to £1) Thank you all again Louise xx Link to comment Share on other sites More sharing options...
munchkinpie Posted February 17, 2011 Author Share Posted February 17, 2011 Interesting on what becomes of LAFHA when you apply for a home loan:biggrin: We are 99.9% sure that wouldnt be happening but we just wanted clarification of where we stood and what the wording of their details was actually saying. IF and when me and the kids do join him (certainly not on this contract which is only 5 months anyway) we would be looking at 3 lots of school fees so we would be looking for a shoe box to live in nevermind a house :wub: lol We are looking at this contract as a foot in the door, a chance for him to spend time in the country researching areas, schools, etc but also meet with other companies in his industry who have expressed an interest in him but just havent done the whole sponsorship thing before. As his occupation only falls into SOL 4 we are having to seek and search as many avenues and open doors as possible. Link to comment Share on other sites More sharing options...
Guest CandS Posted February 17, 2011 Share Posted February 17, 2011 Interesting on what becomes of LAFHA when you apply for a home loan:biggrin: I think you lose your entitlement to LAFHA as soon as you indicate that you want to stay in Oz, for example applying for PR or buying property. Another reason to make sure the salary is ok without accounting for LAFHA! Link to comment Share on other sites More sharing options...
roflie Posted February 17, 2011 Share Posted February 17, 2011 Hi guys, I'm posting for the first time after reading for a week solid.... forgive my interest but what is LAHFA?? i have been offered a job with 9% super... in simple language what does this mean? Thanks - I too have had my head spinning since getting a job offer.... I have no idea what i am entitled to and what to expect my money to come out with but these two questions will start the ball rolling Thanks in advance roflie Link to comment Share on other sites More sharing options...
Guest CandS Posted February 17, 2011 Share Posted February 17, 2011 Hi guys, I'm posting for the first time after reading for a week solid.... forgive my interest but what is LAHFA?? i have been offered a job with 9% super... in simple language what does this mean? Thanks - I too have had my head spinning since getting a job offer.... I have no idea what i am entitled to and what to expect my money to come out with but these two questions will start the ball rolling Thanks in advance roflie Hi Roflie, welcome to the rollercoaster! First up, LAFHA... it's the Living Away from Home Allowance, which allows you to offset some accomodation and food expenses against tax if you are living away from your "principal residence" (so you'll probably be eligible on a 457 visa, but not if you buy a house or apply for residency). You'll find loads of (not always very clear) information about how much you can offset if you do a quick web search, but essentially it looks like it's worth quite a bit extra in your pocket each month. The super is superannuation. That's a contribution to a pension fund to you and me Link to comment Share on other sites More sharing options...
roflie Posted February 17, 2011 Share Posted February 17, 2011 i thought that the super was that striaght forward but i see a lot of people on here including it in their salary/package when really its not money you can get your hands on?! Doe sit work the same way as in the Uk where i put 9% in and so do my employer?? thanks for the info.. greatly appreciated - I plan to move on a 457 visa (and no idea how long that will take!) and just looking in to ways in which i can make my money work best..... I'll approach my employer about the LAFHA.... all tips on salary and the best ways to make it work greatly appreciated!! Link to comment Share on other sites More sharing options...
Guest CandS Posted February 17, 2011 Share Posted February 17, 2011 From discussions with my employer (I'm waiting for 457 visa to be issued) it seems that they contribute 9% but you aren't required to match it. I presume you could if you wanted to, depending on the scheme... With regards getting your hands on the cash, I understand that if you decide to return to the UK you can take the money in the pot home with you. I believe it's taxed at 35% if you do that. Arrangements for transfering a UK pension to Aus if you decide to stay seem to be very complicated and I think an accountant with experience of this would probably be required. For the 457 visa I've been given an estimate of about 6 weeks from lodging the application if your employer is already registered. Bit longer if they aren't. I think that might vary by state, however. Link to comment Share on other sites More sharing options...
roflie Posted February 17, 2011 Share Posted February 17, 2011 thanks CandS.... Thats really helpful.... ...although 9% doesn't suond like a great deal its definately worth considering if you aren't planning on staying ot long as its a nice little lump sum when you leave so i can now understand why people calculate it in their packaging.... Cheers roflie Link to comment Share on other sites More sharing options...
ayatollah Posted February 17, 2011 Share Posted February 17, 2011 9% sounds great to me. You think about it, if you were on $60,000 a year you would have $5,400 a year in the pension pot! If you went home and lifted this from your pension, taxed at 35% leaves you with just over $3,500, which converted at our rates now is ~£2,200. So if you are on a temp visa and plan to come home, you are earning over £2,000 a year to bring home with you. I wouldn't complain! (But I'd also not plan to come home!) EDIT: Is a 9% super contribution mandatory? Or is it employer specific? Link to comment Share on other sites More sharing options...
Guest CandS Posted February 17, 2011 Share Posted February 17, 2011 9% is more than most people are likely to see in the UK. Even 6% (taking off the tax) is a lot more than most employers pay here! If you aren't sure whether you'll come home (like us) then it's good to know what will happen to the money either way. I think the 9% is mandatory in Oz, but someone might know better... Link to comment Share on other sites More sharing options...
roflie Posted February 18, 2011 Share Posted February 18, 2011 I was generalising in the sense that 9% isn't massive but for a super contribution its great. Its good to know there would be a lump sum to help with th emove back to the UK anything go wrong although i'd prefer to be building the pot towards my life in Oz! thanks for the advice and ddiscussion guys - really helpful Link to comment Share on other sites More sharing options...
Guest JonInMelbourne Posted February 18, 2011 Share Posted February 18, 2011 LAFHA is 'Living Away From Home Allowance'. It's essentially a tax break which is available to anyone in Australia who is a temporary resident (including if you're on a 457 visa). It means that your accomodation costs can be paid for out of your pre-tax salary (i.e. you can rent a place at a discount corresponding to whatever your marginal tax rate is). There are a few catches: a. Your employer has to actually do this as part of your payroll, and some employers don't do it, so you need to check. (FYI some big companies here have a policy of not supporting it, so don't assume anything.) b. If you ever apply for permanent residence then you have to immediately stop claiming LAFHA. (As you're not 'away from home' any more!) Since it's a tax break it's unusual for employers to quote this as being part of your 'base package' or salary. I would be suspicious about this as it sounds as though they are trying to make the package sound greater than it is! It doesn't cost the employer anything, although as I said before they have to actually support doing it. Link to comment Share on other sites More sharing options...
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