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  • Exempt accommodation component

    The exempt accommodation component of a LAFHA is the amount you pay for additional accommodation expenses the employee could reasonably be expected to incur at the alternate location.

    Where the allowance paid includes an amount for accommodation which isn't reasonable, that part of the allowance will be included in the taxable value of the LAFHA.

    Determining reasonable accommodation costs

    There are no strict guidelines on how the amount of reasonable accommodation costs should be calculated.

    Factors you could take into account when determining the accommodation costs include:

    • whether the employee will be accompanied by family members
    • the position held by the employee in the workplace
    • the location where the employee will be living
    • whether or not the accommodation will be furnished
    • the employee's current living standards.

    Examples of ways you could determine accommodation costs include:

    • using the accommodation expenditure for an employee with similar circumstances in another location
    • using indexes and guidelines provided by the Australian Bureau of Statistics or commercial organisations to estimate the costs of accommodation in a particular location.
      Last modified: 23 Jun 2017QC 32577