GlossaryPayroll & People
Special Allowance
Also called: other allowance
What is Special Allowance?
Special allowance is the residual salary component used to make gross pay reach the agreed figure once basic pay and named allowances are set. It is fully taxable and carries no specific purpose.
Why Special Allowance matters
It is the flexible part of a salary structure, which also makes it the part most often used to keep basic pay artificially low — something wage regulations increasingly constrain.
How Special Allowance works in practice
Treat it as the balancing figure rather than the main component. A structure where special allowance dominates invites questions from both employees and regulators.
Frequently asked questions
Yes, fully, unless it corresponds to a specifically exempt allowance.