Living-away-from-home allowance fringe benefits

Find out about FBT when you pay an employee a living-away-from-home allowance (LAFHA).

Last updated 5 March 2025

What a LAFHA fringe benefit is

An allowance you pay to an employee is a living-away-from-home allowance (LAFHA) fringe benefit if both the following apply:

The employee's duties require them to live away from their normal residence.
Some or all of the allowance is to compensate the employee for non-deductible additional expenses and other disadvantages caused by living away from their normal residence.

There is a difference between a living-away-from-home allowance and a travel allowance. An allowance paid to an employee for travelling for work is a travel allowance. It is assessable to an employee and doesn't incur fringe benefits tax (FBT).

What to do if you provide a LAFHA fringe benefit

You need to:

work out the taxable value of the LAFHA fringe benefit
keep the appropriate records
calculate how much FBT to pay
lodge your FBT return
pay the FBT amount
check if you should report the fringe benefit through Single Touch Payroll (or on your employee’s payment summary).

Taxable value of a LAFHA fringe benefit

The taxable value of a LAFHA fringe benefit is the amount of LAFHA you pay your employee.

Reductions and concessions

You can reduce the taxable value of a LAFHA fringe benefit by any amounts your employee spends on their accommodation and reasonable food expenses, if either:

your employee maintains a home in Australia at which they usually reside, and the fringe benefit relates to the first 12 months at a particular work location (subject to certain records you need to keep)

your employee works on a fly-in-fly-out (FIFO) or drive-in-drive-out (DIDO) basis (subject to certain records you need to keep).

Example: taxable value of accommodation component of LAFHA

Steve has a residence in Melbourne and is seconded to work in Perth for 12 months. During this time his Melbourne home continues to be available for his own use.

Steve receives a LAFHA from his employer, which includes an accommodation component of $450 per week. He resides with his wife, Helen, who rents a house in Perth for 12 months at a cost of $450 per week. Steve gives his employer a declaration about living away from home.

Steve's employer doesn't have to pay FBT on the accommodation component of the LAFHA ($450 per week).

End of example

For more information about LAFHA fringe benefits, including the extent to which the employee's accommodation and food expenses can be deducted from the taxable value of the benefit, see:

FBT guide: 11 Living-away-from-home allowance fringe benefits
TR 2021/4 Income tax and fringe benefit tax: accommodation and food and drink expenses, travel allowances and living-away-from-home allowances.

Records you need to keep

FBT record-keeping requirements mean that you must keep records that:

show how you calculated the taxable value of the LAFHA fringe benefit
support any exemption or concession you used.

For examples of the types of records you need to keep, see Record keeping for FBT.

Declaration

To access the concessional treatment for LAFHA benefits, your employee will need to give you the relevant living away from home declaration.

Or, instead of getting employee declarations, you can choose to rely on FBT alternative record keeping for LAFHA fringe benefits as detailed in the:

QC71150