Dear Friends,
Want to know whether Bonus can be paid Monthly as a part of Salary
I have seen replies that Yes, it can be shown as CTC & also can be paid in Monthly Salary.
As per Payment of Bonus Act'1965 - Bonus is paid after completion of Financial Year within 8 Months, as it is the part of Companies Profit or at the time of F & F whichever is earlier to the employee who has served for more than 30 Days in a year. It means Bonus is paid for the previous year
How we can pay the Bonus for the current financial year in Salary on Monthly basis ?
If anyone has any extract or judgement, pls forward
Jiten
From India, Mumbai
1Want to know whether Bonus can be paid Monthly as a part of Salary
I have seen replies that Yes, it can be shown as CTC & also can be paid in Monthly Salary.
As per Payment of Bonus Act'1965 - Bonus is paid after completion of Financial Year within 8 Months, as it is the part of Companies Profit or at the time of F & F whichever is earlier to the employee who has served for more than 30 Days in a year. It means Bonus is paid for the previous year
How we can pay the Bonus for the current financial year in Salary on Monthly basis ?
If anyone has any extract or judgement, pls forward
Jiten
From India, Mumbai
Hi Jiten, You are right that Bonus can be included as part of the CTC during Salary Fixation, but cann’t be paid on the Monthly basis as a part of the salary.
From India, Delhi
From India, Delhi
Dear Can any one show the prohibition in the Bonus Act? With Regards V.Sounder Rajan E-mail : rajanassociates@eth.net,rajanassociateslawfirm@gmail.com
From India, Bangalore
From India, Bangalore
Dear Jiten,
It can be paid as part of monthly salary. You are right about mentioning that bonus has to be paid for the previous financial year. That has been prescribed because profit is declared for previous financial year. Even if the company is running in losses, it has to pay minimum bonus to employees and it can be adjusted in add - on / add - off for next year's profit.
If the company pays the bonus amount in advance, its not a problem or non-compliance. So, it can be paid monthly as a part of CTC.
Regards,
From India, Hyderabad
It can be paid as part of monthly salary. You are right about mentioning that bonus has to be paid for the previous financial year. That has been prescribed because profit is declared for previous financial year. Even if the company is running in losses, it has to pay minimum bonus to employees and it can be adjusted in add - on / add - off for next year's profit.
If the company pays the bonus amount in advance, its not a problem or non-compliance. So, it can be paid monthly as a part of CTC.
Regards,
From India, Hyderabad
Dear Ash,
I would like to understand that how we are going to pay statutory BONUS as per the Bonus Act on monthly basis.
How you will maintain the Form No. A, B, C & D then under the provision of that Act.
From India, Delhi
I would like to understand that how we are going to pay statutory BONUS as per the Bonus Act on monthly basis.
How you will maintain the Form No. A, B, C & D then under the provision of that Act.
From India, Delhi
Taking into account the Sec.17(b) of the Payment of the Bonus Act, 1965, which reads as under :
17. Adjustment of customary or interim bonus against bonus payable under the Act.—Whether in any accounting year --
(b) an employer has paid a part of the bonus payable under this Act to an employee before the date on which such bonus becomes payable.
The Bonus can be paid with monthly salary and can be adjusted at the end of the accounting year and the requirement of maintaing registers and returns in form A,B, C & D can be maintained accordingly.
Tarun Singh
From India, Delhi
17. Adjustment of customary or interim bonus against bonus payable under the Act.—Whether in any accounting year --
(b) an employer has paid a part of the bonus payable under this Act to an employee before the date on which such bonus becomes payable.
The Bonus can be paid with monthly salary and can be adjusted at the end of the accounting year and the requirement of maintaing registers and returns in form A,B, C & D can be maintained accordingly.
Tarun Singh
From India, Delhi
Hello,
Bonus under the payment of Bonus Act 1965 cannot be paid in monthly instalment. It is an annual payment and you do not need any case law for this fact of law. Also kindly note:
Regards
samvedan
September 16, 2008
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From India, Pune
Bonus under the payment of Bonus Act 1965 cannot be paid in monthly instalment. It is an annual payment and you do not need any case law for this fact of law. Also kindly note:
- Bonus, conceptually, is a share in the profits of the organization.
- The Act provides a "formula" in which the "available surplus", the "alocable surplus" and therefore the percentage of bonus can be determined. This is one of the fundamental justifications for this being an annual payment.
- The act provides for a "minimum bonus" and a "maximum bonus" that can be paid under the act. Since the "minimum bonus" is required to be paid even if the organization makes a loss and it does not have a supporting balance in the "set on" and "set off" calculations. For this reason it has to be treated by the organization as a "deferred payment" and therefore bonus as part of CTC has to be restricted to 8.33% (and nothing else) of the basic+DA of the coverable employees unless the organization pays bonus @ 20% irrespective of the profit picture (in this case alone the company may treat the entire bonus as CTC).
- What may one do, for sake of convenience, is to first estimate the percentage of bonus that the organization MAY have to pay in a given financial year, then pay out the same in twelve equal instalments but at the end of the year when the accounts are finalized and actual payable bonus is known, appropriate the due payment with the payment actually made. Even in this case it cannot be considered as part of CTC.
Regards
samvedan
September 16, 2008
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From India, Pune
Dear
You may have read the provision of Sect 17 (b) of the Act.The rule of interpretation of a provision of a Statute is that if there is no specific prohibition then by implication it is permitted. The Scheme of the Act has been made taking into account Manufacturing Companies.With the advent of Service Secxtor & Contract Employment since it is a beneficial Legislation if payment of minimum bonus of 8.33 % is adhered to it can be construed as compliance .With advent of Flexi Staffing it will be difficult to trace your employee to pay Bonus later.
The Law Commision will have to take not of these changes in the Employment scenario .
With kind regards,
Chennai – 600 001.
Off : 044-42620864, 044-65874684
,
From India, Bangalore
You may have read the provision of Sect 17 (b) of the Act.The rule of interpretation of a provision of a Statute is that if there is no specific prohibition then by implication it is permitted. The Scheme of the Act has been made taking into account Manufacturing Companies.With the advent of Service Secxtor & Contract Employment since it is a beneficial Legislation if payment of minimum bonus of 8.33 % is adhered to it can be construed as compliance .With advent of Flexi Staffing it will be difficult to trace your employee to pay Bonus later.
The Law Commision will have to take not of these changes in the Employment scenario .
With kind regards,
Chennai – 600 001.
Off : 044-42620864, 044-65874684
,
From India, Bangalore
As mentioned that bonus can be paid on monthly basis and it can be part of CTC.
Now my querry is that for calculation of eligibility under ESI, the bonus so paid on monthly basis shuld be treated as ESI salary.
Further do we have to pay ESI on bonus so paid as well for the employees who are covered under the.ESI ACT? Hope I am clear.
Thanks,
Subhash Arora
From India, Gurgaon
Now my querry is that for calculation of eligibility under ESI, the bonus so paid on monthly basis shuld be treated as ESI salary.
Further do we have to pay ESI on bonus so paid as well for the employees who are covered under the.ESI ACT? Hope I am clear.
Thanks,
Subhash Arora
From India, Gurgaon
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