We have a Diwali bonus for all our office boys' staff. We also provide a bonus when an employee completes five years with the organization. In both cases, an employee receives an additional salary as a bonus amount.
Here is my question - If the gross salary of the office boy is 9,000 INR per month and he has PF, PT, and gratuity deductions on this amount, should he receive a complete bonus of 9,000 INR or are these deductions applicable again on the bonus amount? In other words, will the bonus be treated as another salary with all the mentioned deductions applied?
Please help. Thank you.
From India, Ulhasnagar
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Here is my question - If the gross salary of the office boy is 9,000 INR per month and he has PF, PT, and gratuity deductions on this amount, should he receive a complete bonus of 9,000 INR or are these deductions applicable again on the bonus amount? In other words, will the bonus be treated as another salary with all the mentioned deductions applied?
Please help. Thank you.
From India, Ulhasnagar
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Understanding PF, ESIC, and Gratuity Deductions on Bonuses
PF needs to be paid only on basic + DA (at least until the new amendment to PF is passed), so the bonus is not covered by it. ESIC is on gross wages, so it is to be paid on the bonus as well. I don't know of any law that allows deduction for gratuity. It's illegal to deduct any amount for gratuity. You will be in big trouble.
Regarding PT, as it is a state subject, no answer can be provided without checking the definition of wages in your state act. In general, it's better to pay PF on a higher amount. Being small, it does not pinch and keeps you safe.
From India, Mumbai
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2510PF needs to be paid only on basic + DA (at least until the new amendment to PF is passed), so the bonus is not covered by it. ESIC is on gross wages, so it is to be paid on the bonus as well. I don't know of any law that allows deduction for gratuity. It's illegal to deduct any amount for gratuity. You will be in big trouble.
Regarding PT, as it is a state subject, no answer can be provided without checking the definition of wages in your state act. In general, it's better to pay PF on a higher amount. Being small, it does not pinch and keeps you safe.
From India, Mumbai
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