Reg bonus act I have these three questions:
1) Can I pay a statutory bonus in 2-4 instalments?
2) Do I need to get an employee's signature that the employee has received a bonus(even if he/she gets it by bank transfer)?
3) Can I show the bonus paid in Diwali as last year's bonus while I show it as an expense in the current year, as the audit last date is September 30?
From India, Meerut
1) Can I pay a statutory bonus in 2-4 instalments?
2) Do I need to get an employee's signature that the employee has received a bonus(even if he/she gets it by bank transfer)?
3) Can I show the bonus paid in Diwali as last year's bonus while I show it as an expense in the current year, as the audit last date is September 30?
From India, Meerut
1. Bonus can be paid in instalments. But bonus pertaining to any financial year should be paid in full before 8 months of the close of that financial year. Therefore, bonus of FY 2023-24 shall be paid in installments but before November 2024.
2. If you pay the amount of bonus to individual bank account, no signature is required.
3. Bonus for any financial year will be accounted in that financial year itself. Once the amount is provided, how can you change it? An amount provided in the last year cannot be considered as an expense of the current year.
From India, Kannur
42462. If you pay the amount of bonus to individual bank account, no signature is required.
3. Bonus for any financial year will be accounted in that financial year itself. Once the amount is provided, how can you change it? An amount provided in the last year cannot be considered as an expense of the current year.
From India, Kannur
1.0 Statutory Bonus cannot be paid in instalment. Quantum of bonus % will be calculated within 8 months of completion of financial year on the basis of available surplus and allocable surplus. Moreover, if it is paid every month it will attract ESI if applicable.
2.As Mr.Madhu T K has been replied is correct.
3. Bonus is a deferred wages which means Bonus for a particular financial year will be paid in the next year. Therefore, payable year is always one year later and accounts should be in the payable year. Better to discuss with one CA for proper accounting formalities.
S K Bandyopadhyay ( WB, Howrah )
CEO-USD HR Solutions
+91 98310 81531
skb@usdhrs.in
From India, New Delhi
2.As Mr.Madhu T K has been replied is correct.
3. Bonus is a deferred wages which means Bonus for a particular financial year will be paid in the next year. Therefore, payable year is always one year later and accounts should be in the payable year. Better to discuss with one CA for proper accounting formalities.
S K Bandyopadhyay ( WB, Howrah )
CEO-USD HR Solutions
+91 98310 81531
skb@usdhrs.in
From India, New Delhi
@Madhu.T.K please note that audit filing is Sept end. And to claim expense in the previous year bonus amount must have been deducted from the bank account before filing of audit report. How can we give bonus in Sept? I give in Diwali.
So it means that bonus given during Diwali belongs to previous year as per labour formC/D
However since this bonus could not be debited from my books before filing of audit report, this expense will become expense of current year
@Nanu1953 how can u say mandatory bonus can't be paid in instalments?
From India, Meerut
So it means that bonus given during Diwali belongs to previous year as per labour formC/D
However since this bonus could not be debited from my books before filing of audit report, this expense will become expense of current year
@Nanu1953 how can u say mandatory bonus can't be paid in instalments?
From India, Meerut
I didn't get you. Bonus is provided in the books of accounts of every financial year, and is paid within 8 months of the close of the financial year. If you have provided for bonus in 2023-24, that should be paid before Nov 2024, let it be paid during Diwali, if it comes before November, no issue. An amount provided in the books of accounts of the previous year will not become an expense of the current year, right? You can just pay the amounts by bank transfers, and pass entries debiting the provision for bonus account and bulk of bank or the recipients as per the accounting practice. In this exercise, no expenditure account is created but only cash flow is changed, right?
I am not an expert in Finance and Accounts. Please discuss the matter with your CA.
Form D annual return is submitted for the calendar year, and it shall contain only the rate of bonus, total amounts paid and the date of payment of bonus. It shall show the actual payments and not the amounts provided. Whatever amount is paid in 2024 shall be shown in it.
The payment of Bonus Act does not say that the total amount payable should be paid in whole sum. It only says that bonus should be paid within 8 months of close of financial year. But it will be good for the employees to get an amount in whole especially during festival. The very purpose of bonus that it is a deferred wages will be defeated if it is paid in installments.
From India, Kannur
I am not an expert in Finance and Accounts. Please discuss the matter with your CA.
Form D annual return is submitted for the calendar year, and it shall contain only the rate of bonus, total amounts paid and the date of payment of bonus. It shall show the actual payments and not the amounts provided. Whatever amount is paid in 2024 shall be shown in it.
The payment of Bonus Act does not say that the total amount payable should be paid in whole sum. It only says that bonus should be paid within 8 months of close of financial year. But it will be good for the employees to get an amount in whole especially during festival. The very purpose of bonus that it is a deferred wages will be defeated if it is paid in installments.
From India, Kannur
Bonus is a deferred wages which means Bonus for the financial year will be paid on next financial year. Then % of bonus should be calculated on the basis of gross profit, available surplus, allocable surplus, Set On and Set Off. All these will take some time after closing of accounts. Moreover, if the bonus % is more than 8.33% it will be difficult to pay in instalment and as per PB Act Statutory bonus is to be paid within 8 months of closing of accounts and in one go. Even if bonus is paid in instalments (say every month / every alternate 2 months ) ESI will be applicable if covered.
My name is not Nanu1953. Please mention in future as S K Bandyopadhyay.
S K Bandyopadhyay (WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531
skb@usdhrs.in
From India, New Delhi
My name is not Nanu1953. Please mention in future as S K Bandyopadhyay.
S K Bandyopadhyay (WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531
skb@usdhrs.in
From India, New Delhi
Provision for payment of bonus is created in the accounts of the respective financial year 'on Accrual basis'. The actual payment(s) shall be made either in one lump sum or more than one (for e.g. part of it as 'Diwali bonus' and balance as 'bonus' or ex-gratia) within 8 months of closure of the Financial year. The same is to be adjusted against the Provisions made and balance if any, shall be provided for, if short or written back if 'excess' and the same accounted as 'Prior year Adjustments +/-' in the P & L A/c.
There is no confusion.
From India, Bangalore
There is no confusion.
From India, Bangalore
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
Payment of Bonus Act Queries.docx
Amendment to Payment of Bonus Act 2015.jpg
Bonus act amendment gazette copy.pdf