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Cash-Handling Allowance Calculator

How much of your cash-handling allowance is tax-free? This calculator splits the abono para falhas your employer pays into the part that is exempt from income tax (IRS) and Social Security (up to 5% of your fixed monthly remuneration) and the part that exceeds that limit and is therefore taxed. Enter your monthly base salary and the allowance.

Enter your monthly base salary and the cash-handling allowance the employer pays per month. The exempt limit is 5% of the fixed monthly remuneration, that is (14 × base salary) ÷ 12.

Part exempt from income tax and Social Security
€58.33
Of a €75.00 monthly allowance
Taxed part (excess)
€16.67
Exempt limit per month: €58.33
Fixed monthly remuneration (14 × base ÷ 12)€1,166.67
Exempt limit (5%)€58.33
Cash-handling allowance (month)€75.00
Exempt part (month)€58.33
Taxed part (month)€16.67
Social Security on the excess (11%)−€1.83
Total allowance (12 months)€900.00
Exempt part (year)€700.00
Taxed part (year)€200.00

Whatever exceeds 5% of the fixed monthly remuneration stops being exempt and counts as employment income (category A).

The taxed part also enters income tax, at your rate. This estimate only deducts the 11% Social Security; the income tax depends on your bracket.

Estimate for employees who handle cash. It applies the 5% to the fixed monthly remuneration (14 × base salary ÷ 12) and deducts 11% Social Security on the excess. It does not compute the income tax on the taxed part.

Educational estimate, not advice. The 5% exemption and the 11% Social Security are official. It does not compute the income tax on the taxed part. Always check your payslip.

What the cash-handling allowance is

The abono para falhas is a supplement paid to workers who have to handle cash or valuables and are responsible for them (cashiers, treasurers, collectors). It compensates the risk of small till shortages. As it is not exactly salary, the law exempts it from income tax and Social Security, but only up to a limit.

Tax-free up to 5% of fixed monthly pay

The cash-handling allowance is exempt from income tax and Social Security in the part that does not exceed 5% of the "remuneração mensal fixa" (article 2(3)(c) of the IRS Code). For this purpose, the fixed monthly remuneration is the base salary grossed up with the proportional holiday and Christmas bonuses, that is (14 × base salary) ÷ 12. With a €1,000 base salary, the fixed monthly remuneration is €1,166.67 and the exempt limit is €58.33 a month.

Anything above 5% counts as salary

Whatever the employer pays above that limit stops being exempt and becomes employment income (category A): it enters income tax, at your rate, and the Social Security base (11% employee, 23.75% employer). The calculator shows that excess and deducts the 11% Social Security; the income tax depends on your bracket, so it is flagged but not computed.

It only counts if you handle cash

The exemption applies only to workers who actually handle cash or valuables and are responsible for them. If the allowance is paid to someone who does not meet those requirements, it loses its nature as a cash-handling allowance and is taxed in full, added to the salary. Check your payslip to see whether the amount is identified as abono para falhas.

Per month and per year

The calculator shows the exempt and taxed parts per month and also per year. The allowance is usually paid in each of the 12 months; if in your case it is paid over a different number of months, adjust the months-per-year field to see the right annual total.

Worked example

Imagine a €1,000 base salary and a €75 monthly cash-handling allowance. The fixed monthly remuneration is (14 × 1,000) ÷ 12 = €1,166.67, so the exempt limit is 5% of that = €58.33. €58.33 is tax-free and the €16.67 excess is taxed: it pays 11% Social Security (€1.83) plus income tax at your rate. Over a year, with 12 months, that is €700 tax-free and €200 taxed.

Frequently asked questions

What is the cash-handling allowance (abono para falhas)?
It is a pay supplement given to workers who have to handle cash or valuables and are responsible for them (cashiers, treasurers, collectors). It compensates the risk of small till shortages. It is not required by general law; it comes from the contract or the collective-bargaining agreement.
Does the cash-handling allowance pay income tax and Social Security?
Only the part that exceeds 5% of the fixed monthly remuneration. Up to that limit it is exempt from income tax and Social Security. Anything above 5% is treated as employment income (category A) and pays income tax, at your rate, and 11% Social Security (plus 23.75% borne by the employer).
How is the 5% of fixed monthly remuneration calculated?
For this purpose, the fixed monthly remuneration is the base salary grossed up with the proportional holiday and Christmas bonuses, excluding seniority allowances (diuturnidades), that is (14 × base salary) ÷ 12. The exempt limit is 5% of that. With a €1,000 base salary it gives €1,166.67 of fixed monthly remuneration and €58.33 of tax-free allowance a month.
Who is entitled to the cash-handling allowance?
The tax exemption only applies to workers who actually handle or keep cash, securities or valuables in treasury or collection roles and are responsible for them. If the allowance is given to someone who does not meet those requirements, it is added to the base salary and taxed under the general rules.
What is the difference between the cash-handling allowance and the meal allowance?
They are different allowances. The meal allowance is paid on any working day to cover a meal, with its own exempt limit. The cash-handling allowance compensates the risk of errors for those who handle cash and is exempt up to 5% of the fixed monthly remuneration. You can receive both, but they have their own rules.
What happens if the employer pays a very high cash-handling allowance?
The part above 5% of the fixed monthly remuneration stops being exempt and becomes employment income, added to the salary for income tax and Social Security. The exemption does not disappear entirely: only the excess is taxed, provided the worker meets the cash-handling requirements.

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Author: Thorben Rasmus Idel · Reviewed by: Nahar Geva · Last reviewed: 2026-06-28