Payroll costs
Cash and Management Allowance
Definition
Cash and Management Indemnity is a sum paid to an employee whose job involves handling cash or managing assets or materials, and who is personally liable for them.
It is not compensation for work performed; rather, it compensates for the risk associated with this responsibility—namely, the risk of having to cover any discrepancy, loss, or shortage discovered in the assets held on behalf of the company.
1. Legal Basis
This allowance was established by Order No. 99-0892/MF-SG of May 18, 1999.
It therefore stems neither from a company decision nor from a negotiation: it is based on a statutory provision.
2. A Two-Part Name for Two Situations
The title of the compensation is not merely decorative: it precisely identifies the two cases it covers.
| The first part of the name | The situation covered | What the employee handles or manages |
|---|---|---|
| “cash” | Employees who handle funds | Money |
| “administrative funds” | Employees responsible for managing assets or materials | Securities, inventory, assets |
The common thread between these two situations—and the condition for liability to arise—is that these roles must involve financial responsibility.
The decisive factor is not the handling itself, but the fact of being held accountable for it. An employee who handles funds on a daily basis without being the official bookkeeper is not in the same situation as one whose liability is triggered by a cash discrepancy.
The indemnity therefore does not compensate for a task; it compensates for exposure to risk.
3. The Amount
It is equal to 10% of the base salary.
The amount is not a flat rate: it is proportional.
| Monthly base salary | Allowance (10%) |
|---|---|
| 150,000 CFA francs | 15,000 CFA francs |
| 250,000 CFA francs | 25,000 CFA francs |
| 400,000 CFA francs | 40,000 CFA francs |
Why a percentage rather than a fixed amount? The level of financial liability generally corresponds to job level—and thus to salary. A percentage adjusts compensation based on exposure, whereas a flat rate would treat a cashier and a financial manager the same way.
4. Tax Treatment
It is exempt up to 10% of the base salary.
The notable point is that the allowance rate coincides with the exemption cap:
| Rate | |
|---|---|
| Allowance Amount | 10% of base salary |
| Exemption Cap | 10% of base pay |
Practical consequence: Set at the rate specified in the decree, the allowance is fully exempt. No portion remains taxable.
Example
For a base salary of 300,000 CFA francs:
| Amount | |
|---|---|
| Allowance paid (10%) | 30,000 CFA francs |
| Exemption cap (10%) | 30,000 CFA francs |
| Taxable portion | 0 CFA francs |
What the combination of the two rates means. The text was drafted so that the allowance it establishes is entirely tax-neutral. Compensation for a liability incurred is not treated as a gain.
5. Key Consideration
The exemption is capped; it is not unlimited. A company may choose to pay more than the specified rate, but the 10% cap on the base salary continues to apply to the exemption.
In other words: the cap is the determining factor, not the amount paid.
Key Points in 5 Items
- The cash and management allowance was established by Order No. 99-0892/MF-SG of May 18, 1999.
- The term covers two situations: “cash” (handling of funds) and “management” (valuables or materials).
- In both cases, the requirement is the same: a position involving financial responsibility.
- The amount is 10% of the base salary; it is proportional and not a flat rate.
- It is exempt up to 10% of the base salary: since it is set at the prescribed rate, it is therefore fully exempt.