What's the difference between taxed and untaxed allowances?

  • Modified on: Mon, 20 Feb, 2017 at 3:14 PM

On taxed (gross) allowances, wage tax and social premiums will be deducted. So the net allowance will be lower than the gross allowance.

On an untaxed allowance no wage tax and social premiums will be deducted, so the net allowance will be the same as the full amount entered. Untaxed allowances can only be paid to employees under certain circumstances and often you need to have proof that this employees is making these kind of costs you are reimbursing. Please ask your adviser what the possibilities are in your (is)land.

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