What Myanmar law says
The Union Tax Law 2025-2026 defines assessable salary income broadly: "all wages, salary, allowances, bonuses, commissions, and gratuities" received from an employer. There is no separate allowance exemption in the salary head. The 20% basic personal relief (capped at MMK 10,000,000/year) applies to the aggregate.
The line between taxable allowance and non-taxable reimbursement turns on receipts and business purpose: a flat MMK 50,000 monthly transport allowance is taxable; reimbursing actual taxi fares against receipts is not.
Worked example — monthly gross MMK 1,000,000
| Component | Amount (MMK) | Tax |
|---|---|---|
| Basic salary | 700,000 | Taxable |
| Housing allowance | 150,000 | Taxable |
| Transport allowance | 80,000 | Taxable |
| Meal allowance | 30,000 | Taxable |
| Mobile allowance | 40,000 | Taxable |
| Monthly gross | 1,000,000 | — |
| Annual gross | 12,000,000 | — |
| 20% basic relief | (2,400,000) | — |
| Annual taxable income | 9,600,000 | — |
| Annual PIT (5% on 7,600,000) | 380,000 | — |
| Monthly PIT (PAYE) | ~31,667 | — |
Documentation requirements
- Payslip itemising every allowance separately.
- For reimbursement-style payments, receipts on file.
- PIT remitted to IRD by the 15th of the following month.
- Annual PIT return reconciliation by 30 June following 31 March FY-end.
- Record retention: at least 7 years.
Edge cases
- Salary-in-kind housing — rental value taxable; valuation rules apply.
- Group transport (factory ferry) — generally non-taxable to workers.
- Canteen meals on premises — generally non-taxable.
- Per diem on business travel — non-taxable up to a reasonable level if backed by purpose; flat per diems may attract scrutiny.
- Foreign-currency allowance — convert to MMK at the Central Bank rate on the payment date.
- Donations — to a registered organisation, deductible up to 25% of taxable income.
Employer takeaway
Treat every cash allowance as fully taxable PIT and aggregate them into the gross salary. Apply the 20% basic relief on the aggregate. Receipt-backed reimbursements are not taxable. Allowances count toward the SSB wage base up to MMK 300,000. Itemise on the payslip, withhold PAYE, remit by the 15th, file annual PIT by 30 June, retain records 7 years.
Common payroll mistakes
- Promising "tax-free" allowances in offer letters.
- Stacking the 20% basic relief on each component instead of the aggregate.
- Treating reimbursement and allowance as interchangeable — different tax rules.
- Excluding allowances from the SSB wage base before the cap is reached (see common allowances).
- Not keeping receipts for claimed non-taxable reimbursements.
We publish practical, legally-grounded HR guidance for Myanmar employers. Each piece is reviewed by our compliance team against current MLIP and Labor Law requirements.