Numero Crunchero

Just to add to the above info - once you have done 8 years you rental ceiling is 1/2 way between Fo and CN - so about 82-83K?

Now, onto the tax.
If you are purchasing a place then you pay tax on the entire allowance.
If you have no lease(ie renting a hotel room for less than base rate or bunking with a friend) you will have the base rate added to your salary, then pay tax on the combined amount.
If you rent above the base rate and below the ceiling for your rank/years of service then you will have 10% added to your salary and then be taxed (15%) on that increased amount. So, an FO renting a place for say $60K earning say $65K will pay nothing out of his pocket for rent as the $60K is less than the ceiling. As far as IRD are concerned they will add 10% to his salary and tax that - so $65K+6.5K=$71.5K >> 15% tax on that is $10.7K.

If you rent above the ceiling, say renting for $69700 as a 7 year employee (ceiling $64,700) then you are paying $5k out of your own pocket. The tax works like this....you earn $65K - add 10% +$6.5K but reduce by amount paid above allowance(up to a maximum of the 10%) of -$5K - so taxable income becomes $65K+6.5K-$5k=$66.5K >>15%=$9.97K
You do NOT pay tax on the entire salary assistance(unless you are buying or only getting base rate) - you have your pay pseudo increased by 10% to account for the fact that you are receiving housing assistance.
clear as mud?

PS If you decide to rent a place for less than the base rate, you get taxed on the full base rate regardless of the amount. So if you are entitled to get $24K base rate, you rent for $23K, you still get taxed as if the $24K was in your pocket....if you rented for $25K then you would have 10% of your salary added, as explained in the example above, and be better off than if you rented for $23K!