A living-away-from-home-allowance is an allowance you pay to your employee to compensate for additional expenses incurred and any disadvantages suffered because the employee's duties of employment require them to live away from their normal residence.
Write at item G the amount of benefits you provide to employees as a living-away-from-home allowance, including the exempt accommodation, exempt food components and the statutory food amount.
The statutory food amount is the amount your employees would spend on food at their normal residence – it is set at $42 per week per adult, and $21 per week per child under 12 years of age.
Write the exempt accommodation and exempt food component amounts in the 'Value of reductions (c)' column, provided you have obtained the relevant declarations.
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You must obtain the necessary documentary evidence or declaration of employee expenses and the declaration about living away from home so you can take advantage of any exempt accommodation and exempt food components.
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Example 16: Taxable value of living-away-from-home allowance fringe benefits
Your employee, lives away from home in Australia for the year ending 31 March 2017 and receives $591 per week ($30,732 for the year) as a living-away-from-home allowance. The duties of your employee's employment require the employee to live away from their normal residence.
This is made up of:
- $350 per week ($18,200 for the FBT year) for accommodation
- $241 per week ($12,532 for the FBT year) for food.
The accommodation component reflects what the employee could reasonably be expected to pay for rent, and the food component relates to the total estimated food expenditure of $241 per week. Your employee provides you with the required documentary evidence showing that they spent at least $350 per week on accommodation. The employee declares that they have spent no more than the Commissioner's reasonable food amount and, therefore, is not required to substantiate their expenditure. The employee provides you with a living away from home declaration - employee who maintains an Australian home - on 20 April 2017.
The employee started living away from home at this location in January 2016. Due to the 12 month rule, you are entitled to reduce the taxable value of the allowance for the first 40 weeks of the year starting on 1 April 2016. The employee maintains a home in Australia at which they usually reside and it is available for their use during the year.
The calculation of the taxable value for living-away-from-home allowance fringe benefits is:
Exempt accommodation component = $14,000 (40 weeks at $350 per week)
Exempt food component = $7,960 ($9,640 – $1,680) (40 weeks at $199 [$241 paid less $42 per week statutory food amount])
Taxable value = $30,732 – $14,000 (exempt accommodation) – $7,960 (exempt food) = $8,772
Value of reduction is the total of the exempt accommodation and the exempt food components = $21,960 ($14,000 + $7,960).
You would write at item 23: