What Are Different Types Of Allowances?

What’s the meaning of allowances?

1a : a sum granted as a reimbursement or bounty or for expenses a salary that includes a cost-of-living allowance especially : a sum regularly provided for personal or household expenses Each child receives a weekly allowance.

b : a fixed or available amount provide an allowance of time for recreation..

What are employee allowances?

Allowances are extra payments for things like accommodation, meals and clothing, and are taxed through PAYE. … If you pay your staff extra money for things that aren’t part of their usual wages or salary — like accommodation or travel costs — these payments are known as employee allowances.

What does renumeration mean?

Remuneration refers to the total amount an employee receives for performing a service or for being employed by a company or organization. In the case of executives, remuneration is a reference to the combination of salary, options, bonuses, and other financial compensation.

What is a cell phone allowance?

Based on job responsibilities, eligible employees may qualify for a non-taxable allowance to cover the business use of personal cell phones. Recipients of the allowance will be required to obtain their own mobile communication device, also referred to as a cell phone, and service contract.

What is the difference between benefits and allowances?

A benefit includes an allowance or a reimbursement of an employee’s personal expense. An allowance or an advance is any periodic or lump-sum amount that you pay to your employee on top of salary or wages, to help the employee pay for certain anticipated expenses without having them support the expenses.

What are the 4 major types of employee benefits?

There are four major types of employee benefits many employers offer: medical insurance, life insurance, disability insurance, and retirement plans.

What are special allowances in salary?

Special allowance is a fixed amount that is given to employees over and above the basic salary in order to meet certain requirements. There is a taxable allowance and an exempt allowance. There are different categories of special allowances.

What are fully exempted allowances?

Certain categories of taxes are fully exempted such as allowances given to judges at the Supreme Court and the High Courts. Allowances such as house rent allowance are partially exempted as per Section 10(13A). Other allowances such as city compensatory allowance are fully taxable.

What is FBP in salary slip?

FBP or Flexible Benefit Plan is a way of structuring the salary of an employee. With this, employees are given the option to decide which components they want to take and how much they want to take under each component with some predefined checks and balances. Let us take an example.

Which allowance is exempt from salary?

If you were receiving transport allowance from your employer till FY 2017-18, as a taxpayer, you can claim up to Rs 1,600 per month or Rs 19,200 per annum as exempt from tax before arriving at gross income chargeable to tax. In case of blind, deaf, or handicapped employees, the exemption limit is Rs 3,200 per month.

Can special allowance be more than basic salary?

The Supreme Court ruled that employers cannot segregate ‘special allowance’ from basic wages and must include it for calculation of PF deductions. ThinkStock Photos The Supreme Court ruling is unlikely to impact those with basic salary and special allowances above Rs 15,000 a month.

What is the difference between salary and allowance?

is that salary is a fixed amount of money paid to a worker, usually measured on a monthly or annual basis, not hourly, as wages implies a degree of professionalism and/or autonomy while allowance is the act of allowing, granting, conceding, or admitting; authorization; permission; sanction; tolerance.