Allowance
A regular payment added to basic salary for a stated purpose, such as housing, transport or medical costs.
An allowance is a named component of pay on top of basic salary. Companies use them to describe what the money is for and to treat it consistently across staff in the same grade.
Each allowance should have a clear rule: who receives it, whether it changes with attendance, and whether it counts towards other calculations. When the rule is written down, payroll can apply it by rule instead of by memory.
Related
General information, not tax or legal advice.
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