Allowances
How to configure allowance types, set amounts, and assign recurring allowances to employees for payroll processing.
The Allowances page lets you define and manage the recurring monetary allowances paid to employees as part of their compensation. Allowances are fixed amounts added to an employee's salary each pay cycle -- such as transportation, housing, phone, or meal allowances.
Navigation: HR > Benefits & Allowance > Allowances
How Allowances Work
Allowances in TransportechAI follow a two-step process:
- Configure allowance types -- Define the categories of allowances available (e.g., Transportation Allowance, Housing Allowance).
- Assign to employees -- Assign specific allowance types with specific amounts to individual employees or groups.
Once assigned, allowances are automatically included in each payroll run.
Viewing Allowances
The Allowances page has two main views:
Allowance Types View
This tab shows all configured allowance types:
| Column | Description |
|---|---|
| Allowance Name | The name of the allowance type |
| Code | A short reference code |
| Default Amount | The standard amount for this allowance |
| Frequency | How often the allowance is paid (Monthly, Bi-weekly, etc.) |
| Taxable | Whether this allowance is subject to tax deductions |
| Assigned Employees | Number of employees currently receiving this allowance |
| Status | Active or Inactive |
Employee Assignments View
This tab shows all active allowance assignments:
| Column | Description |
|---|---|
| Employee | The employee receiving the allowance |
| Department | Employee's department |
| Allowance Type | Which allowance is assigned |
| Amount | The actual amount assigned (may differ from the default) |
| Start Date | When the allowance begins |
| End Date | When the allowance ends (blank for ongoing) |
| Status | Active, Paused, or Ended |
Common Allowance Types
| Allowance | Typical Amount | Taxable | Description |
|---|---|---|---|
| Transportation | AED 500-1500/month | Varies | Covers commuting costs for employees without company vehicles |
| Housing | AED 2000-5000/month | Varies | Housing support, common in markets where housing is a significant cost |
| Phone/Communication | AED 100-300/month | Usually Yes | Covers mobile phone and data costs for work purposes |
| Meal | AED 300-800/month | Usually No | Daily meal allowance for employees working on-site |
| Fuel | AED 500-2000/month | Varies | Fuel costs for drivers or employees who use personal vehicles for work |
| Uniform | AED 100-500/year | Usually No | Annual allowance for work uniforms or professional attire |
| Education | AED 500-2000/year | Usually No | Support for professional development courses or certifications |
Creating an Allowance Type
To add a new allowance type:
- Click Add Allowance Type on the Allowance Types tab.
- Fill in the configuration fields:
| Field | Required | Description |
|---|---|---|
| Name | Yes | Display name (e.g., "Transportation Allowance") |
| Code | Yes | Unique short code (e.g., "TRANS") |
| Description | No | Details about when and why this allowance applies |
| Default Amount | Yes | The standard amount for this allowance |
| Currency | Yes | The currency (typically auto-filled with your company's default currency) |
| Frequency | Yes | Payment frequency: Monthly, Bi-weekly, or Annual |
| Taxable | Yes | Whether this allowance is subject to tax |
| Applicable To | No | Restrict to specific departments or roles (leave empty for all) |
- Click Save to create the allowance type.
The default amount serves as a starting point when assigning the allowance to employees. You can override the amount for individual employees if their entitlement differs -- for example, senior employees may receive a higher housing allowance.
Assigning Allowances to Employees
Individual Assignment
- Switch to the Employee Assignments tab.
- Click Assign Allowance.
- Fill in the assignment fields:
| Field | Required | Description |
|---|---|---|
| Employee | Yes | Select the employee |
| Allowance Type | Yes | Select the allowance type |
| Amount | Yes | The amount for this employee (pre-filled with the default) |
| Start Date | Yes | When this allowance begins |
| End Date | No | When this allowance ends (leave blank for ongoing) |
| Notes | No | Any notes about this assignment |
- Click Save.
Bulk Assignment
- Click Bulk Assign on the Employee Assignments tab.
- Configure the bulk assignment:
| Field | Required | Description |
|---|---|---|
| Allowance Type | Yes | The allowance to assign |
| Amount | Yes | The amount per employee |
| Start Date | Yes | When the allowance begins |
| Apply To | Yes | All Employees, Specific Department, or Specific Role |
- Click Preview to see which employees will receive the allowance.
- Review and click Confirm.
Bulk assignment skips employees who already have an active assignment for the same allowance type. If you need to update amounts for existing assignments, use the individual edit function or the bulk update feature.
Editing Allowance Assignments
To change an employee's allowance:
- Find the assignment in the Employee Assignments tab.
- Click on the row to open the detail.
- Update the amount, end date, or other fields.
- Click Save.
| Change | Impact |
|---|---|
| Amount increase/decrease | Takes effect from the next payroll period |
| Adding an end date | The allowance will stop after the specified date |
| Pausing | The allowance is temporarily suspended and excluded from payroll |
| Resuming | A paused allowance becomes active again from the next payroll period |
Ending an Allowance
To stop an allowance for an employee:
- Open the assignment detail.
- Click End Allowance (or set an End Date).
- Confirm the action.
The allowance will be excluded from payroll runs after the end date.
Impact on Payroll
Active allowances are automatically included in payroll calculations:
| Payroll Component | How Allowance Appears |
|---|---|
| Earnings | The allowance amount is added to the employee's gross earnings |
| Tax Calculation | If the allowance is marked as taxable, it is included in the tax calculation base |
| Net Pay | The allowance increases the employee's net pay (minus any applicable tax) |
| Payslip | The allowance appears as a separate line item on the employee's payslip |
Review all active allowance assignments before running payroll. Any changes made after a payroll run is processed will only take effect in the following period.
Best Practices
- Standardize where possible -- Use the default amounts and assign consistently across departments. Custom amounts should be the exception, not the rule.
- Document overrides -- When you assign a non-default amount, add a note explaining why (e.g., "Senior role - higher housing band").
- Review quarterly -- Check that allowance assignments are still appropriate. Employees who have changed roles or departments may need updated allowances.
- Coordinate with payroll -- Before making bulk changes to allowances, coordinate with the payroll team to ensure changes are reflected in the correct pay period.
- Use end dates -- For temporary allowances (e.g., a one-time uniform allowance), always set an end date to prevent ongoing payments.