Private ruling: Fringe benefits tax - living-away-from-home allowance
Date of advice: 4 February 2026
Published: 23 March 2026
Ruling period: Fringe Benefits Tax (FBT) Year Ending 31 March 20XX | FBT Year Ending 31 March 20XX | FBT Year Ending 31 March 20XX | FBT Year Ending 31 March 20XX
Date scheme commenced: 1 April 20XX

Ruling: Q1: Is a new 12-month period applicable to the Employer under section 31D of the Fringe Benefits Tax Assessment Act 1986 (FBTAA), where an Employee moves temporarily to the same city on more than one occasion, whilst working on separate and discrete projects on each of those occasions that were unknown at the time of the previous move, and in total the time spent in that city is more than 12 months? | A1: No. | Q2: If the answer to Question 1 is No, does the answer change where the Employee resides at a different location in that city during each of those temporary moves? | A2: No.


Relevant legislative provisions: Fringe Benefit Tax Assessment Act 1986 , section 31D | Fringe Benefits Tax Assessment Act 1986, subparagraph 31D(2)(b)(i) | Fringe Benefits Tax Assessment Act 1986 , subparagraph 31D(2)(b)(ii) | Fringe Benefit Tax Assessment Act 1986, subsection 136(1)

Reasons for decision: Summary: No. A new 12-month period cannot commence in accordance with section 31D of the FBTAA, where the employee moves temporarily to a location where the employee has at any time previously lived and worked and received a living-away-from-home allowance (LAFHA). | Detailed Reasoning - Detailed reasoning: A LAFHA benefit is an amount of money paid to an employee by an employer to compensate for additional expenses and disadvantages (if any) of having to live away from his or her normal residence in order to perform employment duties. For a payment to an employee to be considered a LAFHA, there are three conditions that must be met: 1. It is an allowance an employer pays an employee in respect of the employment of that employee. 2. The duties of their employment require them to live away from their normal residence. 3. The whole or part of the allowance is in the nature of compensation for: • non-deductible additional expenses an employee might be expected to incur, or • non-deductible additional expenses an employee might be expected to incur and other disadvantages suffered, because the duties of an employee's job require them to live away from their normal residence. Access to the tax concessions for LAFHA and benefits is limited to a period of 12 months for an employee (other than employees working on a fly-in fly-out or drive-in drive-out basis) at a particular work location, and to cases where the employee: • maintains a home in Australia at which they usually reside and is available for their immediate use and enjoyment during that period that their duties of employment require them to live away from home and • can substantiate all expenses incurred on accommodation and • can substantiate all expenses incurred on food or drink (if the food or drink expenses incurred are more than the Commissioner of Taxation's reasonable amounts) and • provides their employer with a declaration about living away from home and, where required, a declaration on substantiation. Maintaining a home in Australia requires an employee's usual place of residence must continue to be available for their use and enjoyment at all times (or their spouse or child who would normally reside with them at that place) while they are living away from home. That is, the employee must incur the ongoing cost of maintaining this residence (such as mortgage or rental payments and rates), and it cannot be rented out or sub-let while they are living away from home. The focus of this ruling is the application of section 31D of the FBTAA, which limits payment of a LAFHA to a period of 12 months for an employee at a particular work location. Section 31D of the FBTAA states: 1. The employee satisfies this section if the fringe benefit relates only to all or part of the first 12 months that the duties of that employment require the employee to live away from the place in Australia where he or she usually resides when in Australia. 2. Each of the following paragraphs applies for the purposes of subsection (1): (a) the employer may pause the 12-month period; (b) start a separate 12-month period if: (i) the employer later requires the employee to live at another location for the purposes of that employment; and (ii) it would be unreasonable to expect the employee to commute to that other location from an earlier location for which the employer provided a benefit of the same kind to the employee; (c) other changes in the nature of that employment are irrelevant; (d) treat as one employer any of the employee's earlier employers that is or has been an associate of the current employer. | Detailed Reasoning - 31D(2)(b)(i): A separate 12-month period may commence if the employee's work location changes, that is, the employee is required by their employer to move to another location to perform the duties of employment. The expression 'another location' is not defined within the FBTAA and it is without a general law definition. There is no legislative guidance which provides assistance to determine what constitutes 'another location' for the purposes of restarting the 12-month period. It is the Australian Taxation Office (ATO) view that 'another location' in subparagraph 31D(2)(b)(i) of the FBTAA should be interpreted in relation to any 'earlier locations' where the employee was required to live. Once a 12-month period has been exhausted for a particular location, it cannot be revived by a new 12-month period. Were this not the case it would allow for employees to alternate between locations while receiving concessionally taxed LAHFA benefits. | Detailed Reasoning - 31D(2)(b)(ii): The second requirement for a separate 12-month period to commence is it must be unreasonable for the employee to commute to the new location from the earlier location for which a LAFHA was provided. To start a 12-month period, subparagraph 31D(2)(b)(ii) of the FBTAA requires a consideration of the proximity of the 'earlier location' for which the employer provided a LAFHA benefit to the 'other location' and whether is it 'unreasonable to expect an employee to commute between these locations. The effect of this is to limit the availability of a new 12-month period and to prevent employees from receiving the benefit by living at another location that is essentially the same, such as different locations within the same city. This is an objective test and it is necessary to consider the individual facts and circumstances of each case. This test is simple when the locations clearly show it would be unreasonable to commute between them, such as in example 1.3 of the Revised Explanatory Memorandum to the Tax Laws Amendment (2012 Measures No. 4) Bill 2012 (the Revised Explanatory Memorandum) being Sydney and Melbourne. That example does not reference the reasonableness test of subparagraph 31D(2)(b)(ii) of the FBTAA. However, difficulty may arise when the locations are relatively close to the other locations, such as Sydney and Penrith. In these circumstances, further information would be required to determine whether it is reasonable to expect an employee to commute between the locations. | Detailed Reasoning - Time between LAFHA instances: Subparagraph 31D(2)(b)(i) of the FBTAA does not impose a limit on the time that the employer can 'later require' the employee to live at another location. Whether a separate 12-month period can start in a particular location will not be influenced by whether a long period of time has occurred between living and working away from home in a location. | Detailed Reasoning - Living at home between LAFHA instances: A separate 12-month period will not be 'reset' if an employee lives at the place where they usually reside between instances of LAFHA at a particular location. If this was the case, then the inclusion of the clarifying aspects of subsection 31D(2) of the FBTAA arguably would essentially be redundant. An employee could simply return home between instances of LAFHA to restart the 12-month period, rather than utilise the ability to pause the 12 month period pursuant to paragraph 31D(2)(a) of the FBTAA. In example 1.3 of the Revised Explanatory Memorandum, the LAFHA fringe benefit provided to the employee for the nine months relates to 'part of the first 12 months' that they are living away from home. After receiving the nine months LAFHA benefit, the employee returned to their usual place of residence (Canberra) and three months concession for that location was still available. If living at home between instances of receiving a LAFHA benefit in a location allowed for a separate 12-month period to start, then there would be no need for the remaining three months to be conserved for a later LAFHA instance at that location. | Detailed Reasoning - Change in employment duties: A change in the duties of the employment, such as working on a separate project with the same employer, cannot start a separate 12-month period. Paragraph 31D(2)(c) of the FBTAA specifically provides that changes in the nature of the employment that are made within the same work location, other than the requirement to live away from home, are irrelevant in determining whether the employee satisfies the section. Paragraph 1.42 of the Revised Explanatory Memorandum states that: Changes to the conditions of employment, such as a promotion of the employee to a management position, or a change in the employee's job title, within the same work location, do not affect the 12-month period. Changes to an employee's duties, including working on separate and distinct projects, would fall within the characterisation of 'changes in the nature of the employment' and 'changes to the conditions of employment.' This is furthered by the inclusion of paragraph 31D(2)(d) of the FBTAA that requires a current employer and any former employers that are associates to be treated as one employer for the purpose of calculating the 12-month period. Paragraph 1.43 of the Revised Explanatory Memorandum describes the meaning of this as: If an employee takes up employment with an associate of their employer, the 12-month period is not affected for the same employment location. For example, a corporate restructure that transfers the employee from one entity to another associated entity does not affect the calculation of the 12-month period. However, this treatment is not limited to sequential employers (such as in the example of restructuring) as it applies to ' any of the employee's earlier employers that is or has been an associate of the current employer.' The inclusion of this paragraph contemplates that duties of an employee between associate employers have the potential to be vastly different, and yet the 12-month period still applies. | Detailed Reasoning - Scenarios: Employees 1, 2 and 3: In all 3 scenarios the employees' specialist skills and knowledge required them to work on a new project at a location where they had previously lived, worked and received a LAFHA. The period in between the assignments differed for each employee. Given the ATO view is that the 12-month time limit is a maximum, lifetime limit for that employment location per employment, a new 12-month period cannot commence pursuant to section 31D of the FBTAA if an employee is required to work on a new project at a location where they have previously received a LAFHA. Employees 1, 2 and 3 have lived previously in Location A, during which time each received a LAFHA. Based on the information you provided, much of the production takes place in Location A or in close proximity. Therefore, the employer will not be eligible to access the LAFHA concessions for a new 12-month period when the employees commence work on a new project at a later time in Location A. | Detailed Reasoning - Question 2: If the answer to Question 1 is No, does the answer change where the employee resides at a different location in that city during each of those temporary moves? | Summary: No. If the new location is in the same or within the proximity of the earlier location, section 31D of the FBTAA denies a new 12-month period commencing with respect to living away from home benefits at the new location. | Detailed Reasoning - 31D(2)(b)(i): As discussed in Question 1, a separate 12-month period may commence if the employee's work location changes, that is, the employee is required by their employer to move to another location to perform the duties of employment. It is the ATO view that 'another location' in subparagraph 31D(2)(b)(i) of the FBTAA should be interpreted in relation to any 'earlier locations' where the employee was required to live. Employees 1, 2 and 3 have lived previously in Location A and based on the example provided, the accommodation is in the same location or within close proximity of the earlier location. To decide if it is unreasonable to commute between the earlier location and the new location, the same principle applies to whether an employee's job requires them to live away from their normal residence. That is, if it is unreasonable to commute between an employee's work site and where the employee's normal residence is located. It is a question of fact and will depend on each employee's circumstances. With reference to the decision of the Minproc Engineers Limited v DFC of T 98 ATC 2170 case and the circumstances in this case, we consider that it is not unreasonable to expect an employee to commute between Location A and Location B as the distance between the two is 8.9 kilometres. In addition, it is not considered unreasonable to travel between Location C and Location A as the distance between the two is 4.7 kilometres. As a result, the 12-month period will be accumulated under both locations. Furthermore, the duration of the time gap between the two assignments is not relevant. What is relevant is whether or not the assignments are with the same employer. Therefore, we do not consider that subparagraph 31D(2)(b)(ii) of the FBTAA is satisfied.

• The Employer is part of a group of companies well known in Australia for the production of quality television programs. | • Each series has been separately commissioned as a discrete standalone production. | • A number of full time employees were required to relocate to Location A for various periods of time ranging from 128 to 335 days to carry out the duties of their employment. | • These employees ordinarily reside and maintain a home interstate. | • Of these employees, 3 employees (i.e., Employees #1, #2 and #3) were previously engaged by the Employer in relation to the production and filming of the earlier seasons. | • Accordingly, these employees had previously been required to relocate to different locations in close proximity to Location A for the following durations to perform their employment duties in connection with the earlier series. | • Furthermore, each such subsequent assignment are separated by clear periods of time that the employees are back working at their home location, where they undertake different duties. | Employee Benefits: In addition to their regular salary, the Employer provides the following benefits to the employees: | • An allowance for private accommodation, as required; | • An allowance for utilities and/or cleaning expenses; and | • A weekly per diem allowance to the employees identified above. | These payments were treated as a living-away-from-home allowance benefits ( LAFHA ) by the Employer in relation to the affected employees identified above, with concessions claimed in respect of those employees who had provided LAFHA declarations. | Reasons for decision: These reasons for decision accompany the Notice of private ruling for the entity. | This is to explain how we reached our decision. This is not part of the private ruling.