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Yes. The payment is a work related allowance and is assessable in terms of paragraph 26(e) of the Income Tax Assessment Act 1936. It is paid in addition to any entitlement that the employee may have under an award in respect of reimbursement or payment of actual moving expenses.

The allowance is paid as an incentive for accepting a transfer and does not represent a reimbursement of expenses incurred by an employee as a result of that relocation.

Where an employer directly pays an amount of removal expenses or reimburses an employee's removal costs, the payment or reimbursement is a fringe benefit and is not assessable income in the hands of the employee.

Taxation Ruling TR 92/15 explains the difference between an allowance and a reimbursement for the purposes of determining whether a payment is assessable income or is subject to fringe benefits tax. Example 1 An employee of ABC Bank receives a payment of $2000 to encourage her to accept a transfer from Parramatta to Dubbo. The payment is assessable income in the hands of the employee. Example 2 An employee of ABC Bank incurs moving expenses for relocating from Parramatta to Dubbo. The Bank reimburses the expenses incurred. The reimbursement is a fringe benefit and subject to fringe benefits tax.