Configuring Allowances

Allowances

Allowances are benefits provided to an employee in addition to their salary or wages. Examples of allowances include fuel, higher education, or gym memberships.

Allowance benefits are less complex than some of the other benefits types we will encounter, as they simply add an entitlement amount for the value of the benefit. However, as with all benefits, we will start by creating a benefit schedule and a pay component.

Set Up an Allowance Benefit

Business Example

Ace USA has initiated a new car allowance for certain employees. In this exercise, you will create a new allowance benefit which allows these employees to enroll in this new benefit in their People Profile. The first step is to create a new benefit schedule and schedule period specifically for the car allowance.

Task 1: Create a New Benefits Schedule and Schedule Period for Car Allowance

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Steps

Create a new benefit schedule using the data in the following table:

Field	Value
Schedule Period	Period ID: 2025CARALLOWPERIOD Period Name: 2025 Car Allowance Period Enrollment Opens: 01/01/2025 Enrollment Closes: 12/01/2025 Enrollment Effective From:01/01/2025 Enrollment Effective Until: 12/31/2025
Schedule Name	2025 Car Allowance Schedule
Schedule Period	2025 Car Allowance Period
Schedule ID	2025CAR

Use the Action Search and navigate to Benefits Admin Overview.
Select Create New: Benefit Schedule.
In the Schedule Period field, select +.
Enter the data from the table.
Choose Save and close the Schedule Period screen.

Task 2: Create a Pay Component for Car Allowance

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Steps

Create a pay component called Car Allowance using the following data:

Field	Value
Effective as of	01/01/2025
Pay Component ID	CarAllowance
Name	Car Allowance
Status	Active
Pay Component Type	Amount
Is Earning	Yes
Currency	USD
Frequency	Monthly (pay frequency of employee)
Recurring	Yes
Can Override	Yes

Use the Action Search to open Manage Organization, Pay, and Job Structures.
Select Create New→Pay Component.
Enter the data given in the above table.
Select Save.

Task 3: Create a Car Allowance Benefit, using the schedule and pay component

ExerciseStart Exercise

Steps

Create a new benefit called Car Allowance using the data in the below table. Use the schedule period, benefit schedule, and pay component we just created:

Field	Value
Benefit Type	Allowance
Benefit ID	CARALLOWANCE
Benefit Name	Car Allowance
Benefit Short Description	Car Allowance
Effective From	01/01/2025
Currency	US Dollar
Integration Mode	Benefit Objects
Legal Entity	Ace USA
Benefit Schedule	2025 Car Allowance Schedule
Frequency	Monthly
Enrollment Required	Yes
Days Remaining to Enroll	Show
Enrollment Type	Manual
Entitlement Amount	800
Pay Component	Car Allowance
Payment Mode	Payroll
Is Default	Yes

Use the Action Search and navigate to Benefits Admin Overview.
Choose Create New→Benefit.
Enter the data given in the above table.

Confirm if the benefit allowance is showing up in the People Profile.
1. From the Home menu, select My Employee File.
2. Select the Benefits Information tab.
3. Under My Active Enrollments, select Go To Benefits.
4. Verify the Car Allowance is visible under Other Available Benefits.

Summary

Allowances are supplementary benefits given to employees along with their salary.
Examples of allowances include fuel, higher education, or gym memberships.