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Transport Allowance: Is it considered a benefit?

Transport allowance in Singapore is the amount of money an employee receives, to cover their commuting expenses. Such expenses usually cover transport to and from work, regardless of public transport or car-related costs. 

There are two types of transport allowance in Singapore – Fixed and Distance-based. A fixed allowance is a fixed amount given to the employee on a monthly basis while the latter is calculated based on the distance between the employee’s residence and workplace.

It is not compulsory for companies in Singapore to provide for transport. This is entirely up to the employer’s discretion to extend this benefit to employees. In some companies, employees can even choose to allocate a certain amount of their salary towards a variety of benefits including transport, insurance, and more.

The allowance is categorised as an income source and is taxable in Singapore. Hence, employers must report it as part of employees’ income in the annual tax returns.

Issues with Transport Allowance

As part of flexible benefits, some companies offer transport allowance for employees. The allowance are claimable for public transport, private hire car rides, and even private car parking costs. In recent years, multiple issues regarding these allowances were raised.

  • Insufficient Allowance
    • There were feedback from employees that the allowance is insufficient. This is especially true for those who live further away from their workplace. In addition to the rising costs of living in Singapore, this issue has becoming increasingly significant.
  • Inequitable Treatment
    • Some employees in the same company may receive different amounts of transport allowance based on job seniority, thus leading to perceived inequitable treatment. Some companies addressed this issue by implementing transparent and consistent policies for calculating such allowances.
  • Lack of Transparency
    • Some employees have reported a lack of transparency in the calculation of transport allowance. Instead of clear guidelines, they are uninformed of the criteria used to determine their allowance, leading to confusion and dissatisfaction.
  • Limited Scope
    • Current schemes mainly cover commuting expenses related to public transport or car-related costs. However, some employees who use alternative modes of transportation, such as bicycles or e-scooters, may not be eligible for any allowance.
  • Hybrid Work Arrangements
    • There are questions about remote workers’ entitlement to transport allowance, especially with the increase in work-from-home arrangement. Some companies have adjusted their policies to provide alternative benefits for remote workers.