Providing a person with accommodation in exchange for work can have income tax and GST implications, for both the provider and the worker.
This often happens with seasonal and casual workers in farming, hospitality and tourism industries. Accommodation arrangements may include food as well as a place to sleep. Accommodation provided may be on top of payment or instead of payment for work.
26 February 2019
A business owner (like a farmer, restaurant owner, or someone in the accommodation business) who provides accommodation to workers in return for them carrying out tasks should be aware that there could be income tax, GST and other implications of providing that accommodation.
For example, the value of accommodation may have to be treated as salary or wages for the worker and, for owners of commercial dwellings like hotels, hostels or camping grounds, there will be GST on the supply of the accommodation.
It is especially important for businesses in industries like farming, hospitality and tourism who engage students, backpackers and other casual workers for seasonal or short term arrangements to be aware of this issue.