What are allowances?
Allowances are extra award payments — like tool, travel, first-aid or meal allowances — paid on top of an employee's base rate.
Allowances are additional payments set out in a Modern Award or enterprise agreement that an employer must pay on top of the base hourly rate. They cover costs or conditions of the job, such as buying your own tools, travelling for work, holding a first-aid qualification, or working in difficult conditions.
Common allowances include tool, laundry or uniform, travel and vehicle, meal, and first-aid allowances. The amount and the conditions that trigger each allowance are set by the relevant award, and the Fair Work Commission adjusts many of them each year.
Key facts
- •Allowances are paid on top of the base rate, not included in it
- •Common types include tool, laundry, travel, meal, and first-aid allowances
- •Set by the relevant Modern Award or enterprise agreement
- •Some allowances are expense reimbursements; others are extra pay for skills or conditions
- •The Fair Work Commission reviews most award allowances on 1 July each year — check the current amount in your award
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Award FinderFrequently asked questions
Are allowances taxed?
It depends on the type. Allowances paid as extra income (like a first-aid allowance) are generally taxable, while genuine reimbursements of expenses may be treated differently. Check your payslip and the ATO guidance for your situation.
How do I know which allowances I'm entitled to?
Your entitlement comes from your Modern Award or enterprise agreement. Find your award using the Fair Work Ombudsman's tools, then check the allowances clause, or ask FairWork Mate.
FairWork Mate is an independent commercial service. We are not affiliated with, endorsed by, or associated with the Fair Work Ombudsman, the Fair Work Commission, or any Australian Government agency. Content is general information and estimates only — not legal, financial, or tax advice. Always verify with the Fair Work Ombudsman (13 13 94) or a qualified professional.