GlossaryPayroll & People
Dearness Allowance
Also called: DA
What is Dearness Allowance?
Dearness allowance is a cost-of-living component paid mainly in government and public sector employment, revised periodically against an inflation index. It counts alongside basic pay for provident fund and gratuity.
Why Dearness Allowance matters
Where DA applies, it changes the base for retirement benefits every time it is revised, so payroll must track those revisions rather than treating pay as static.
How Dearness Allowance works in practice
Private sector structures often fold this into a special allowance instead. Where DA exists, apply revisions from the effective date, including any arrears.
Frequently asked questions
Most do not, using consolidated allowances instead. It is standard in government employment.