A predetermined amount paid to an employee, in addition to his or her salary or wages, that may cover all or only some of the expenses stipulated in the employment contract. The employee is not required to account for its use.
- The allowance does not necessarily correspond to the amount of expenses incurred by the employee, nor do the expenses which the allowance is intended to cover necessarily correspond to the expenses actually incurred.
- Whatever their purpose, expense allowances must be included in the employee's income unless the Taxation Act states otherwise. Therefore, the amount of an allowance paid to an employee to cover expenses incurred in the performance of their duties, even if it covers expenses incurred on your behalf, must generally be included in the employee's income as a taxable benefit.