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Monday, December 01, 2008

Is PHP5,000.00 Reasonable Amount for Transportation Allowance in the Philippines?

I received this question from a reader:

Is a monthly transportation allowance of 5000 Peso reasonable? In addition, staff still can claim for mileage for distance traveled.

My Answer:
Thank you for entrusting me with your question. I do not have survey data to compare how you pay transportation allowance with other companies but let me share with you my opinion on this matter:

I believe there are two reasons why companies give transportation allowance to certain employees. The primary reason is to cover actual transportation expenses of employees who are always out in the field. The other reason is to find another way to compensate in order to attract and retain talents.
If your reason is to cover actual travel expense, the reasonableness of the amount depends on its ability to cover the cost of travel, which should include in my opinion actual transportation expenses, meals and maybe to compensate for the inconveniences that come with travel which provides for the incentives aspect of a travel allowance.

If your reason is to give additional compensation to attract and retain talents, it becomes more complicated. This is because employees look at the total package that the company has to offer. The effectiveness of the transportation allowance to attract and retain talent depends on the total package. By that I mean, cash compensation, the environment and the work itself. PHP 5,000.00 is nothing if the employee's pay is below industry standards or if they are unhappy with the work or the people they work with. A generous compensation package has nothing on bad workplace.

So, going back to your question on whether 5,000 is reasonable or not, I'd say that if it covers actual transportation costs it is reasonable. The reimbursement of gas based on mileage should make it even more attractive. If the intent is to offer additional compensation to attract and retain talents, it should be looked at in relation to the total package which include cash, work and company. When the employees don't get satisfaction on the work and the company, they would tend to ask for more on the cash department.

Dear readers, I believe that this is an important topic and I believe that some of you have more experiences on this than I have so I appreciate that you share your thoughts on this topic by leaving a comment below.

2 comments:

  1. I think it depends on how your transportation really costs

    if it is less than that value and you have a little allowance, so maybe it's reasonable

    but if you spend more than that then it is not

    I had a job and I quit it because it's far from where I live and the travel time is 3 hours back and forth

    the company tried to dissuade me by giving me travel allowance although they didn't tell me how much but I still quit because the travel is very stressful due to traffic

    hehe

    I think this issue is really significant especially to sales, med or realty representatives

    ReplyDelete
  2. Anonymous1:37 PM

    Job applicants should consider the travel time/distance BEFORE they accept a job.

    Training of new people can be expensive and time-consuming for companies, and sudden resignations can disrupt business operations.

    If your allowance is not enough to cover actual travel expenses and you think you should receive a larger transpo allowance, discuss this with your boss first. Maybe this is their standard allowance. Explain why you think you should get an increase.

    Make an appeal to your employer first.

    If you are not happy with the outcome, you can tender your 30-day resignation notice.

    ReplyDelete

If you have an opinion about this topic or a related experience you want to share, please feel free to leave a comment but please be respectful. No bad words please or I will be constrained to delete it.