Admins can define their own allowance schemes. Allowances can be customized to either be taxable, non-taxable or partially taxable.
Allowances can also be prorated to the day or hour, giving the company complete flexibilty with their allowance schemes.
To create an Allowance Type, go to Company Setup>Payroll>Other Income>Allowance Types.
Click Add Allowance Type. Enter the name of the Allowance Type to identify it when assigning it to Employees. You can also decide to make this Allowance Type fully taxable, non-taxable, or limit the taxable amount. Click Add. Otherwise, click Cancel.
You can see the Allowance Type you just created.
You can now assign this Allowance Type to employees. For more information, click here.