Allowances
Allowances are usually a specific amount paid in addition to an agreed salary, such as allowances for tools, uniforms and overtime.
All allowances paid by an employer to an employee are liable except for the exempt component of both the overnight accommodation and motor vehicle allowances.
Overnight accommodation allowance
An overnight accommodation allowance is paid to an employee to cover temporary accommodation costs for a night’s absence from their usual place of residence.
Temporary accommodation means for a continuous period of:
no more than 21 days, or
more than 21 days where the employee continues to maintain a domestic dwelling to accommodate the employee and/or their family.
This allowance, including meals and incidental expenses, is liable only if it exceeds the exempt rate.
Living away from home allowance
A living away from home allowance is paid to an employee who has moved and taken up temporary residence away from their usual place of residence so that they are able to carry out their employment duties at a new, temporary workplace.
A living away from home allowance is commonly misinterpreted as an accommodation allowance.
This allowance is liable only if it exceeds the reasonable benefit limits under the Fringe Benefits Tax Assessment Act 1986.
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