An allowance is a fi­xed amount of money or an in-kind benefit given to an employee for the purpose of performing a specifi­c task by an employer. An allowance is also given as a form of compensation for some unusual conditions of employment. An allowance which is usually an addition to an employee’s salary is subject to tax unless it is specifically exempt by law.

Below is the list of allowances subject to and exempt from Income Tax.

List of Non-Taxable Allowances for Public and Private Sectors

(Revised July 22, 2025)

 

NO. Non-Taxable Allowances Reference Legislation Remarks
1. Travelling Allowance (as opposed to transportation) Sec. 5(b)

(ii), ITA 81:01

 If proven to the satisfaction of the Commissioner-General that the allowance has been expended for the purposes in respect of which the allowance has been given, that the amounts was utilized for business purposes and not the personal benefit of the employee.

(As opposed to transportation allowance which is provided for travel from home to office or place of employment which is taxable.)
Company Car in place of travelling allowance If proven to the satisfaction of the Commissioner-General that the allowance has been expended for the purposes in respect of which the allowance has been given, that the amounts was utilized for business purposes and not the personal benefit of the employee.

(As opposed to transportation allowance which is provided for travel from home to office or place of employment which is taxable.)
2. Station Allowance Sec. 5(b)

(iv) ITA 81:01

 Notwithstanding, that the employee is a private sector employee, the purpose of station allowance remains the same, that is, an allowance provided for persons serving in the interior and river districts and in the North West Districts or other similar areas and is intended for the purpose of assisting in meeting the appreciably higher cost of living in those areas.

Where the allowance has been given for the purposes above and have been so utilized then that allowance can be granted as a tax-free allowance irrespective of the Public Sector or the private sector, given the facts represented in the legislation quoted above, “no income tax shall be payable on …any station allowance,”
3. Entertainment Allowance Sec. 5(b)

(ii) ITA 81:01

 If proven to the satisfaction of the Commissioner-General that the allowance has been expended for the purposes in respect of which the allowance has been given.
4. Maternity Allowance Sec. 19 (1)

(a)(v) NI&SSA 36:01

 Maternity Allowance are periodical payments for 13 weeks to an insured woman who has lost wages as a result of pregnancy or confinement. (This is in keeping with NIS).
5. Subsistence Allowance Sec. 5(b)

(ii) ITA 81:01

 If proven to the satisfaction of the Commissioner-General that the allowance has been expended for the purposes in respect of which the allowance has been given.

 

 

6. Leave Passage (Vacation Allowance) Sec. 5(b) (iiA) ITA 81:01 No income tax shall be payable for vacation allowance not exceeding one month’s gross salary (Private & Public Sector employees).
7. Severance Pay

Benefits

 

(Redundancy Allowance)

 Sec. 5(b)(iv) ITA 81:01 Section 21(1) Termination of Employment and Severance Pay Act Chapter 99:08), “On termination of his employment, an employee who has completed one or more years of continuous employment with an employer shall be entitled to be paid by such employer a severance or redundancy allowance …”
8. Security Allowance Sec. 5(b)

(ii) ITA 81:01

 If proven to the satisfaction of the Commissioner-General that the allowance has been expended for the purposes in respect of which the allowance has been given.
9. Telephone Allowance Sec. 5(b)

(ii) ITA 81:01

 If proven to the satisfaction of the Commissioner-General that the allowance has been expended for the purposes in respect of which the allowance has been given.
10. Medical Discharge Sec. 5(b)(iv) ITA 81:01 Where an employee is medically discharge because they are medically unfit to continue employment.
11 Uniform Allowance Sec. 5(b)

(ii) ITA 81:01

 A clothing allowance or payment is NOT considered taxable if wearing the item is a condition of employment, and it is not worn for general use.
12. Medical Expense for Whole Time Directors Sec. 5(b)(i) ITA 81:01 Whole time service director means a director of a company who is required to devote substantially the whole of his time to the services of such a company in a managerial or technical capacity and is not the beneficial owner of, or able, either directly or through the medium of other companies or by any other means, to control, more than five percent of the share capital or voting power of such company;

The exclusion of an allowance for medical or dental expenses or for any passage to or from Guyana shall not apply in respect of any director other than a whole-time service director
Dental Expense for Whole Time Service Directors Sec. 5(b)(i) ITA 81:01 The exclusion of an allowance for medical or dental expenses or for any passage to or from Guyana shall not apply in respect of any director other than a whole-time service director
Passage to and from Guyana for Whole Time Director Sec. 5(b)(i) ITA 81:01 The exclusion of an allowance for medical or dental expenses or for any passage to or from Guyana shall not apply in respect of any director other than a whole-time service director

 

 

13. Expenses (‘General Expenses’) Sec. 5(b)

(ii) ITA 81:01

 If proven to the satisfaction of the Commissioner-General that the allowance has been expended for the purposes in respect of which the allowance has been given.
14. Gratuity Sec. 13(z) ITA 81:01 Pensions, gratuities paid in lieu of pensions to Government employees in respect of contracts of employment or service, and annuities paid out of superannuation funds. However, private sector employees’ gratuity is taxed at the applicable tax rate.
15. Overtime Allowance Sec.

20(1)(d) ITA 81:01

 Employees are allowed up to fifty thousand dollars ($50,000) monthly tax free.
16. Second Job Allowance Sec. 20(1)(c)

ITA 81:01

 Employees are allowed up to fifty thousand dollars ($50,000) monthly tax free
17. Child Allowance Sec. 20(1)(b) ITA 81:01 An individual is entitled to claim one hundred and twenty thousand dollars ($120,000) per year for each child under the age of eighteen. This allowance is limited to a maximum of ten thousand dollars ($10,000) per month, per child, and will be apportioned based on the individual’s earnings period.

Please note that only one person may claim the child allowance for each eligible child.
18. National Insurance Scheme Contribution Sec. 16(k) ITA 81:01 Employees are allowed a deduction of 5.6% of their salary. However, the annual ceiling for the National Insurance Scheme Contribution is based on gross income up to two hundred and eighty thousand dollars ($280,000) per month or three million, three hundred and sixty thousand dollars ($3,360,000) annually.

NB. All employed persons are allowed a deduction of fifteen thousand, six hundred and eighty dollars ($15,680) monthly or one hundred and eighty-eight thousand, one hundred and sixty dollars ($188,160) annually when calculating chargeable income.
19. Medical and Life Insurance Premium Paid Sec. 16(L) ITA 81:01 The deduction is subject to the lesser of premiums paid, ten percent (10%) of the individual’s gross income or six hundred thousand dollars ($600,000) annually.
20. Meal Allowance Sec. 5(b)

(ii) ITA 81:01

 If proven to the satisfaction of the Commissioner-General that the allowance has been expended for the purposes in respect of which the allowance has been given.

 

List of Taxable Allowances for Public and Private Sectors

 

No. Taxable Allowances Reference Legislation Remarks
1. Duty Allowance Sec. 2 ITA

81:01

 Represent payment for the benefit of the employee. This is a form of remuneration and is subject to Income Tax.
2. Acting Allowance Sec. 2 ITA

81:01

 Represent payment for the benefit of the employee. This is a form of remuneration and is subject to Income Tax.
3. Overtime Allowance Sec. 20(1)(d) ITA 81:01 If this allowance exceeds fifty thousand dollars ($50,000) per month or six hundred thousand dollars ($600,000) yearly, the excess amount will be subject to Income Tax.
4. Risk Allowance Sec. 2 ITA

81:01

 Represent payment for the benefit of the employee. This is a form of remuneration and is subject to Income Tax.
5. Meal Allowance Sec. 5(b)

(ii) ITA 81:01

 Where the employee receives meal allowance as part of their renumeration package, Income Tax will be applicable.
6. Responsibility Allowance Sec. 2 ITA

81:01

 Represent payment for the benefit of the employee. This is a form of remuneration and is subject to Income Tax.
7. Housing Allowance (excluding Rent) Sec. 5(b) ITA 81:01 It must be noted that the housing allowance must be wholly utilized for the purposes given for the allowable portion to be considered as a deductible and before computing taxes on the excess balance of the Housing allowance.
8. Telephone Allowance Sec. 5(b)

(ii) ITA 81:01

 Where the employee receives the allowance for personal use, Income Tax will be applicable.
9. Security Allowance Sec. 2 ITA

81:01

 Where the employee receives security allowance as part of their renumeration package Income Tax will be applicable.
10. Transportation Sec. 5(b)

(ii) ITA 81:01

 Where the allowance is granted for commuting between home and work, that amount will be subject to Income Tax.
11. Motor Car Travelling Allowance Sec. 5(b)

(ii) ITA 81:01

 Where the allowance is granted for travelling extensively by motor car in the performance of their official duties.
12. Medical and Dental Sec. 2 ITA Whole time service director means a director of a

 

 

(Other Directors) 81:01

 

 

 

 

 

 

 

Sec. 5(b)(i) ITA 81:01

 company who is required to devote substantially the whole of his time to the services of such a company in a managerial or technical capacity and is not the beneficial owner of, or able, either directly or through the medium of other companies or by any other means, to control, more than five percent of the share capital or voting power of such company;

The exclusion of an allowance for medical or dental expenses or for any passage to or from Guyana shall not apply in respect of any director other than a whole-time service director.
13. Severance Pay in Lieu of termination of Services Sec. 7 ITA

81:01

 Payment received as compensation for termination is subject to Income Tax.
14. Gratuity Sec. 13(z) ITA 81:01 Pensions, gratuities paid in lieu of pensions to Government employees in respect of contracts of employment or service, and annuities paid out of superannuation funds. However, private sector employees’ gratuity are taxed at the applicable tax rate.
15. Second Job Allowance Sec. 20(1)(c) ITA 81:01 If this allowance exceeds fifty thousand dollars ($50,000) per month or six hundred thousand dollars ($600,000) yearly, the excess amount will be subject to Income Tax.
Note:

1.      Allowances, benefits in kind and prerequisites that are often disguised remunerative packages are taxable.

2.      It should be noted that when a company provides sums of money for an employee to perform the function of the organization for the organization purposes, those sums must not be included as an allowance to the employee on his or her salary, rather it is deemed as an expense of the company and should be treated as such.

 

In keeping with, Paragraph 10 of the Income Tax (Deduction of Tax from Emoluments) Regulations, Income Tax Act, Chapter 81:01, which states that, “Where the employer makes a payment to or for the benefit of the employee in respect of his income tax, the amount of emoluments which the employer pays to the employee shall be deemed, for the purposes of deduction of tax under these Regulations to be such a sum as will include the amount assessable on the employee in respect of the payment made by the employer in respect of the employee’s income

tax.”