A living away from home allowance (LAFHA) is money your employer pays you because your job requires you to live away from your normal home. It is dealt with under fringe benefits tax (FBT) rules, and FBT is paid by the employer, not by you. For FIFO workers there are two things to know first: a LAFHA is not automatic, and it is not something you claim in your own tax return. If your employer puts you in a camp and flies you there, you are being given accommodation and transport directly, which is not an allowance at all.
This is general information, not tax advice. Every rule below comes from the Australian Taxation Office (ATO), checked in October 2026. For your own situation, ask your employer's payroll team, a registered tax agent or the ATO.
What is a living away from home allowance?
The ATO says an allowance your employer pays you is a LAFHA fringe benefit if both of these apply:
- Your duties require you to live away from your normal residence.
- Some or all of the allowance is to compensate you for non-deductible additional expenses and other disadvantages caused by living away from your normal residence.
In plain terms, it is cash paid to cover the extra cost of accommodation and food, and the inconvenience, when work makes you live somewhere other than home.
Living-away-from-home allowance fringe benefits (ATO)ato.gov.au
What do most people get wrong about LAFHA?
Four beliefs come up often. The ATO's material says otherwise on each.
| What people believe | What the ATO material shows |
|---|---|
| Every FIFO worker gets LAFHA | It is an allowance an employer may choose to pay. The rules describe how it is taxed if it is paid, not a right to receive it |
| LAFHA is a tax deduction you claim | It is a fringe benefit. The employer works out its taxable value, lodges the FBT return and pays the FBT |
| Camp and flights are LAFHA | Accommodation and transport provided directly are separate benefits with their own FBT rules |
| It is the same as a travel allowance | A travel allowance is assessable income of the employee and does not incur FBT. A LAFHA is a fringe benefit |
The third row is the one that matters most for FIFO. The ATO's own declaration form for fly-in fly-out employees says it should not be used by employees who received the benefit of both the use of accommodation and transport to and from their usual place of residence. In other words, the standard camp-and-flights arrangement sits outside the LAFHA paperwork.
Who pays tax on a LAFHA?
Your employer. The ATO's instructions for LAFHA are addressed to employers: work out the taxable value, keep the records, calculate the FBT, lodge the FBT return and pay it.
The starting point is that the taxable value of a LAFHA is the full amount paid. The employer can reduce that value by the amounts you spend on accommodation and reasonable food, but only in one of two situations:
- You maintain a home in Australia at which you usually reside, and the benefit relates to the first 12 months at a particular work location.
- You work on a fly-in fly-out or drive-in drive-out basis.
Both are subject to records the employer has to keep. If neither applies, the ATO's guide says the taxable value is simply the amount of the benefit.
How do the LAFHA rules apply to FIFO and DIDO workers?
FIFO and DIDO workers have their own route to the concession. The ATO's FBT guide says the reduced taxable value applies when the employee:
- works on a fly-in fly-out or drive-in drive-out basis
- has residential accommodation at or near their usual place of employment, and
- gives the employer the appropriate declaration about living away from home.
The 12-month limit in the other route is not listed as a condition of this one.
The guide also defines what working on a fly-in fly-out or drive-in drive-out basis means (the everyday meaning of both terms is in what does FIFO mean?). All of these must apply:
- On a regular and rotational basis, you work for a number of days and have a number of days off, and they are not the same days in consecutive weeks, unlike a standard five-day week and weekend.
- You return to your normal residence during the days off.
- It is customary in your industry for employees doing similar work to work on a rotation and return home on days off, and the work carries on with other employees while you are off. The guide gives miners as the example.
- It is unreasonable to expect you to travel between work and your normal residence each day, given where they are.
- It is reasonable to expect that you will go back to living at your normal residence when the job no longer requires you to live away.
The ATO's example is a mining employee on a 7-days-on, 7-days-off roster, who qualifies as rotational because the working days differ from one week to the next. A Monday-to-Friday worker does not. How rosters are written is covered in FIFO rosters explained.
FBT guide, chapter 11: living-away-from-home allowance (ATO)ato.gov.au
One point the ATO material does not spell out is how a particular site arrangement should be classified when a worker gets some benefits in kind and some in cash, for example a camp room plus a cash allowance. That depends on the facts, and the ATO says its indicators are guidelines only. If that is your situation, ask payroll how they have treated it, and check with the ATO or a registered tax agent.
Which parts of a LAFHA are exempt?
Two components can reduce the taxable value. The detail is in the ATO's FBT guide.
- Accommodation. The exempt accommodation component is the part of the allowance that equals the accommodation expenses you actually incur while living away. You have to substantiate all of it. If you are paid more for accommodation than you spend, the excess is taxable.
- Food and drink. The exempt food component is the food part of the allowance that you actually spend, adjusted for a statutory food amount of $42 a week for each adult and $21 a week for each child, which represents normal food costs at home. How the adjustment works depends on whether your employer has already taken your normal food costs into account. The Commissioner of Taxation publishes a reasonable food and drink amount each year. Spend up to that amount and you do not need receipts for food. Spend more and you must substantiate all of it.
- Anything else. A part of the allowance paid for the disadvantage of living away, such as isolation, is not exempt.
There is one more rule that affects rosters. The guide says the taxable value is not reduced by the food component for any period when you are back living at your normal residence. A food allowance paid for your days at home is fully taxable for FBT.
What paperwork will your employer ask for?
A declaration. The ATO says that to access the concessional treatment, the employee needs to give the employer the relevant living-away-from-home declaration, in the approved form.
- FIFO and DIDO employees use the declaration for employees who fly-in fly-out or drive-in drive-out.
- A second declaration covers accommodation and food or drink expenses, unless you have given your employer documentary evidence of those expenses instead.
- The employer must have the declarations by the day its FBT return is due, or by 21 May if it does not have to lodge one.
- You must keep the evidence of your expenses for five years.
Since 1 April 2024, employers can choose to rely on their own business records in place of some declarations. Either way, keep the invoices and receipts for the accommodation and food you pay for while you are living away.
Living-away-from-home declarations (ATO)ato.gov.au
Is LAFHA the same as a travel allowance?
No, and the difference changes who is taxed. The ATO's FBT guide sets out the indicators.
| Living away from home allowance | Travel allowance |
|---|---|
| Paid because you have taken up temporary residence away from your usual home to work at a new, temporary workplace | Paid because you are travelling in the course of doing your job |
| There is a change of job location | There is no change of job location |
| More common to be accompanied by spouse and family | Generally not accompanied by spouse and family |
| Paid for longer periods | Paid for short periods |
| A fringe benefit: the employer deals with FBT | Part of the employee's assessable income, not a fringe benefit |
The guide adds that these are guidelines only and that no single indicator decides the question. As a practical general rule, it says, where the period away does not exceed 21 days, the allowance will be treated as a travelling allowance rather than a LAFHA.
Does a LAFHA show up on your income statement?
It can. Employers report fringe benefits for an employee when the total taxable value goes over $2,000 in an FBT year. The amount appears as a reportable fringe benefits amount on your income statement. For a LAFHA, the ATO's guide says any amount is reported that way, not as a taxable allowance.
A reportable fringe benefits amount is not included in your assessable income, so you do not pay income tax on it. The ATO says it is used for other tests, including:
- the Medicare levy surcharge
- study and training loan repayments, such as HELP
- child support obligations
- eligibility for some income-tested government benefits.
If you have a study loan or pay child support, ask payroll whether your allowance will create a reportable amount.
FBT guide, chapter 5: reportable fringe benefits (ATO)ato.gov.au
What if your employer provides the camp and the flights?
Then you are not being paid a LAFHA. The FBT questions are your employer's to answer, though you may still be asked for a declaration.
- Transport. The ATO's FBT guide says transport an employer provides under a fly-in fly-out arrangement is exempt from FBT where a list of conditions is met, including that your usual place of employment is at a remote location, you are given accommodation at or near the worksite on working days, you work a number of days on followed by a number of days off and return to your usual home on your days off, and daily travel would be unreasonable.
- Accommodation. Where an employer pays for or reimburses accommodation instead of paying a cash allowance, the guide sets out a separate exemption, with the same FIFO conditions: residential accommodation at or near your usual place of employment, and a declaration.
Those are the employer's rules to apply. They are why a payslip for a camp-and-flights job can show wages and no LAFHA line.
FBT guide, chapter 20: exempt benefits (ATO)ato.gov.au
What does this mean for where you live?
Every FIFO rule above turns on the same idea: you have a normal residence, you go back to it on your days off, and you are expected to keep living there. For a FIFO worker flying out of Perth, that home is often a room in a share house, and where to live in Perth as a FIFO worker compares the suburbs near the airport. Whatever your tax position, have a written agreement in your own name, pay rent by a method that leaves a record, and keep the receipts.
Two related ATO rules are worth knowing. The zone tax offset is based on where you live, not where you work, and the ATO gives a fly-in fly-out worker as its example of someone who is not eligible. And you cannot claim trips between your home and your regular place of work, even if you live a long way from it. What is left after tax on a mining wage is worked through in FIFO salary: what workers really take home.
Kipmates is a room-share marketplace launching in Perth. Listings show the weekly rent and the move-in date, your roster sits on your profile, and hosts can mark a household as FIFO-friendly. You can browse rooms, and the steps for a move are in moving to Perth for FIFO work: the complete checklist.
FAQ
What is the living away from home allowance?
It is an allowance an employer pays an employee whose duties require them to live away from their normal residence, to compensate for additional non-deductible expenses and other disadvantages. The ATO treats it as a fringe benefit, so the employer deals with the tax under FBT rules.
Do FIFO workers get LAFHA?
Not automatically. An employer chooses whether to pay one. Where an employer provides the camp accommodation and the flights directly, there is no allowance: those are separate benefits with their own FBT rules. If a LAFHA is paid to a FIFO or DIDO worker, the ATO has a specific concession and a specific declaration form for it.
Is LAFHA taxable income?
A LAFHA is a fringe benefit, not assessable income of the employee. The employer pays any FBT. If the taxable value of your fringe benefits is over $2,000 in an FBT year, a reportable amount appears on your income statement, and the ATO uses it for tests such as HELP repayments and the Medicare levy surcharge.
Does the 12-month LAFHA limit apply to FIFO workers?
The ATO lists two separate routes to the concession. One is for employees who maintain a home in Australia, and it is limited to the first 12 months at a work location. The other is for employees working on a fly-in fly-out or drive-in drive-out basis, and the 12-month limit is not listed as a condition there. Confirm how it applies to you with your employer or the ATO.
What is the difference between LAFHA and a travel allowance?
A LAFHA is paid when you live away from home at a temporary workplace, and it is a fringe benefit. A travel allowance is paid when you travel in the course of your job, and it is part of your assessable income. The ATO's practical rule is that an allowance for a period away of 21 days or less is treated as a travel allowance.
Sources
Checked October 2026. All sources are from the Australian Taxation Office.
- Living-away-from-home allowance fringe benefits, last updated 6 March 2025.
- Fringe benefits tax: a guide for employers, chapter 11, Living-away-from-home allowance fringe benefits, sections 11.4 to 11.11.
- Fringe benefits tax: a guide for employers, chapter 20, Exempt benefits, sections 20.2 and 20.4.
- Fringe benefits tax: a guide for employers, chapter 5, Reportable fringe benefits, sections 5.4 and 5.5.
- Living-away-from-home declaration, last updated 26 March 2024.
- Zone tax offset, last updated 8 June 2026.
- Trips you can and can't claim, last updated 4 May 2026.
