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Could allowances be considered productivity incentive payments, and be excluded from the gross rate of pay?


Updated by MOM

Gross rate of pay is defined as the total amount of money including allowances, payable for one month's work. However, it excludes:

  • Additional payments (overtime, bonus, AWS).
  • Reimbursement of special expenses incurred during the course of employment.
  • Productivity incentive payments.
  • Travel, food and housing allowances.

Therefore, if the allowance is specifically designed to increase productivity or reward employees for their contributions, it could be excluded from the gross rate of pay.

This information is sourced from MOM.

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