Allowance

Last updated: 2026-03-29

Overview

The Allowance module allows you to manage financial benefits given to employees on top of their base salary. You can create different categories of allowances (like Housing, Travel, or Meals) and then assign them to specific jobs for a defined period.

When Do I Use This?

  • When setting up your company's standard benefits, such as a standard 10% Transportation allowance.
  • When assigning a temporary benefit to an employee, like a relocation allowance that lasts for six months.
  • When your accounting team needs to track specific employee benefits in separate expense accounts automatically.

How To Use

1. Creating an Allowance Type (The Category)

Before you can give an employee an allowance, you must define the type of allowance.

  1. Go to the Human Resources menu and navigate to Allowance Types.
  2. Click + New to create a new category.
  3. Enter a Name (e.g., "Housing Allowance").
  4. Set either a fixed Amount OR a Percentage.
  5. Select the appropriate Account Expense and Account Payable ledgers (ask your accountant if you are unsure).
  6. Click Save.

2. Assigning an Allowance to an Employee/Job

Once your types are created, you can grant them to specific jobs.

  1. Navigate to Allowances in the menu.
  2. Click + New.
  3. Select the specific Job (employee role) receiving the allowance.
  4. Choose the Type of allowance you created earlier.
  5. Set the Start Date and End Date to control when the employee receives this money.
  6. Add a Note if needed, then click Save.

Field Descriptions

Allowance Type Form

Field Name Description
Name The title of the benefit (e.g., Meal Allowance, Remote Work Stipend).
Amount A fixed flat-rate amount to be paid (use this if the allowance is a set cash value).
Percentage A percentage value (use this if the allowance is calculated based on the employee's base salary).
Account Expense The financial ledger account where the cost of this allowance is recorded for the company.
Account Payable The financial ledger account used to track the money owed to the employee before it is paid.
Note Any internal rules or descriptions about this allowance category.

Allowance Assignment Form

Field Name Description
Job The specific employee role or position that is receiving this allowance.
Type The category of allowance being granted (selected from your Allowance Types).
Start Date The first day the employee is eligible to receive this allowance.
End Date The last day the employee will receive this allowance. Leave this far in the future for permanent allowances.
Note Specific details about why this job is receiving the allowance.
Tip: Always double-check your dates! If an allowance is meant to be temporary, entering the correct End Date ensures the system will automatically stop adding the allowance to the employee's payroll when it expires.
Accounting Tip: Do not fill in both Amount and Percentage on an Allowance Type. Choose one method of calculation to prevent payroll errors.
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