Project Allowance is an amount of money paid to employees who are involved in projects or other specific work in an organization. It is compensation provided to employees as part of their salary package to defray their expenses incurred in projects on behalf of the organization.
Project allowance means the total amount of financial resources a company provides to its personnel to compensate any expenses they generate when participating in projects managed by the company. It is taxable and should be included in employee pay statement. Thus, the working time and effort of an employee involved in projects should be paid for the amount of expensed incurred and should be reflected in the employee’s pay-slip as part of the salary package.
Employee project allowance is to be included in project expenses and regarded as part of the total cost estimate. A typical allowance sheet includes these items:
- Brief description of the allowance
- Gross price of the allowance, before taxes are deducted
- Tax rate that is applied to the allowance
- Total price with taxes