Yes. The excess of the government’s stipulated allowance is taxable. The national service personnel should be treated as temporary staff and the allocated salary would be the excess allowance.  For instance, if the government’s stipulated allowance is $750.00 and the company decides to pay $1,200.00, the first $750 is tax-free because it’s a national service allowance. The $550 ($1,200-$750) excess should be taxed using the graduated tax rate.