Additional payments made to employees to cover specific work-related expenses.
Allowances are supplemental payments made to employees in addition to their base salary to cover specific costs or recognize particular working conditions. Common allowances include housing allowances, transport allowances, meal allowances, clothing allowances, and remote work stipends. In the Middle East, allowances often form a significant portion of the total compensation package. Payroll software itemizes allowances separately on payslips and applies correct tax treatment for each allowance type.
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