What is a non-taxable allowance?

A non-taxable allowance is a specific amount of money that an employer provides to an employee for a specific purpose, such as transportation, housing, or meals, that is not subject to income tax. These allowances are typically provided to cover expenses related to the employee's job and are not considered part of the employee's taxable income. This means that the employee does not have to pay income tax on the allowance amount.