Taxable Income

LAFHA is a special allowance employers pay when you’re required to temporarily live and work somewhere away from your usual home. For example, if you usually work in Melbourne and your company sends you to work temporarily in regional NSW, they might pay you an allowance to cover extra living costs.

This allowance isn’t included as taxable income in your personal tax return, provided it meets specific ATO guidelines. Instead, it’s treated as a Fringe Benefit, and your employer handles the tax. Your employer can reduce their tax obligation by the actual expenses you incurred on accommodation and food while away from home, provided you maintain your usual home and submit the required declarations.

No, Australia doesn’t have an inheritance tax. However, if you invest that inherited money and it generates income (like interest or dividends), then you’ll pay tax on that income.

You’re right to be cautious. Investment schemes that promise huge returns or unusual tax benefits can often be too good to be true. It’s wise to thoroughly research any such scheme, and even better, consult a professional financial advisor or directly contact the ATO before investing. Otherwise, you might end up losing your investment, face penalties, or be required to repay any improper tax benefits.

No, interest from joint accounts must be split equally between account holders. Declaring all interest on one person’s tax return is incorrect and can trigger an ATO audit.

Yes. If a minor earns more than $416 in unearned income (like from trust distributions), they’re required to lodge a tax return. The income earned will generally be taxed at special minor rates.

No. Instead, you can use the ATO’s Refund of Franking Credits form. You can lodge this quickly online or via mail directly to the ATO.

Generally, yes. Most overseas pensions are taxable if you’re an Australian resident, but some exceptions exist. It’s best to check your specific pension with the ATO or a tax professional.

Yes, unless Centrelink explicitly says it’s tax-exempt. Even tax-exempt payments must be included in your tax return’s income test section, as they might affect your eligibility for certain tax offsets. You can easily access this information through Centrelink’s online services or their mobile app.

You don’t pay tax on the money you initially brought in. However, if that money generates interest or investment income after arriving, you’ll need to pay tax on that income.

Generally, income earned overseas is taxable in Australia, but there are some exceptions. If you’re overseas for more than 90 continuous days working as an aid worker, government employee, or in certain charity roles, your income might be exempt. Otherwise, you should declare overseas income on your Australian tax return, but you may be eligible for a foreign income tax offset if you’ve paid tax overseas.

for any foreign tax you paid on that income. Even if your income is from one of the above categories of exempt income, and you satisfied the 91 day criteria, you will need to record the income you earned on your tax return as exempt foreign employment income. You will not be taxed on this amount, but it will affect the rate of tax you pay on your other income.