Changes to living away from home allowance begin October 1, SMEs warned to get up to speed

Small businesses employing staff from overseas are being warned to read up on their tax obligations, after new changes to the Living Away From Home Allowance passed through the Senate yesterday.

The changes, which were announced by the Federal Government earlier this year, will take effect from October 1.

Stephanie Caredes, tax counsel at the Tax Institute, says businesses need to be aware of the changes and keep on top of any new rules that will affect their employees.

“Businesses will need to consider what the transitional rules will mean for any of their current arrangements, and when the new rules start they’ll need to make sure they’re adhering to those as well,” she told SmartCompany this morning.

Businesses have railed against the new rules, with the mining industry saying it will hurt the number of employees who will be allowed to receive allowances and harm Australia’s attractiveness as a place to work.

Many other industries hire foreign workers, including the SEO industry, which relies on talent from across the world.

The new rules maintain that foreign workers will only be able to receive a tax-free allowance if they have a home they maintain within Australia, which is not their main place of residence.

Residents will also lose the allowance unless they maintain a home. Travel and meal benefits will no longer be given for short trips, either.

Caredes says businesses need to make sure they understand the new rules by October 1.

“Read up on them, understand them, and seek advice from a registered tax agent. You just need to be sure that you’re up to date.”