B. Earning Components | 6. City Allowance
City Compensatory Allowance (CCA), also known as CCNA or City Allowance, is an optional salary component offered by employers to compensate employees for the higher cost of living in metropolitan or tier-1 cities.
🚕 Purpose of CCNA:
- Helps employees manage higher urban expenses related to housing, travel, and living
- Sometimes clubbed with travel or hardship allowances as per company policy
📋 Key Features:
- Not mandatory under labour laws or government regulations
- Not percentage-based – amount is entirely at the employer’s discretion
- May or may not be included in the salary breakup
- Can vary based on city category, employee grade, or company policy
✅ Summary:
- Urban cost-of-living allowance offered for city-based expenses
- Optional benefit – employer decides whether to include it
- Amount is flexible – not fixed or percentage-tied
- May be merged with travel or hardship allowances
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