Living allowance is a type of remuneration given to employees to help them in taking care of the expense of-everyday costs. It is a kind of fringe benefit or allowance that is typically given in addition to a regular wage or salary. Employees who are required to relocate for work or who live in an area with a higher cost of living than the company's headquarters frequently receive a living allowance. The employee's location, the policies of the company, and the responsibilities of their job may all influence the amount of the living allowance.
Living allowance is a common benefit offered by many businesses in the UAE, GCC, and KSA. This is because of the way that these locales have many ostracize laborers who might need extra monetary help to assist with taking care of the greater expense of living. The employee's level of seniority, the size of their family, and the cost of living in the area all play a role in determining the amount of the living allowance.
It is essential for both employers and employees to comprehend their tax obligations, as living allowances frequently fall under taxation. To avoid any confusion or disagreements, employers should also ensure that they have clear policies in place regarding the payment of living allowances.