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AFC1(Enthusiast)Enthusiast
17 July 2022

We have recently signed on our two carpentry contractors as employees. We pay higher than the award tool allowance. If they don't spend it all, is that an issue? Should some be reduced and reallocated as OTE? With the rising cost of things we want to make sure they can cover any expenses and not have funds going to super they need now, but if it's not all spent is that an issue? Is there a limit to paying higher allowances? The award rates are very low.


Confused. Thanks.

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3 replies
668 views
3 replies

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Most helpful reply

CaroATO(Community Support)Community Support
19 July 2022

Hi @AFC1,


It's not an issue if a worker doesn't use all their allowance.


You can reduce the amount of allowance, but remember to make sure to pay the minimum amount. There's no limit on the maximum allowance you pay.


Have a look at the information on the Fair Work Ombudsman web site that talks about allowances.

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Most helpful reply

CaroATO(Community Support)Community Support
19 July 2022

Hi @AFC1,


It's not an issue if a worker doesn't use all their allowance.


You can reduce the amount of allowance, but remember to make sure to pay the minimum amount. There's no limit on the maximum allowance you pay.


Have a look at the information on the Fair Work Ombudsman web site that talks about allowances.

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Tool Allowance - contractor to employees | ATO Community