1. Define bonus payment to an employee.
2. Is a bonus applicable for a new or one-year-old company? Is the number of employees a requirement? If so, how many? Are temporary employees entitled to a bonus?
3. If a company is making a loss in the first year or first four years, would a bonus become applicable? If yes, what percentage?
4. In which accounting year must a bonus be paid, and by what date?
5. What is the range of the bonus amount, from the minimum to the maximum?
6. Would a salary of more than $10,000 or $15,000 per month be eligible for a bonus payment?
7. For those earning over $10,000 per month, is it mandatory to be paid as ex-gratia instead of a bonus?
8. Can a bonus be included in the employee's CTC and paid in the employee's monthly salary, with a minimum of 8.33%?
9. In the event of employee misconduct, can a bonus be held back or adjusted in the employee's dues in their full and final settlement?
Appreciate your response against each of these questions.
Regards,
Chandrasekar
Regional Manager - India
From India, Chennai
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2. Is a bonus applicable for a new or one-year-old company? Is the number of employees a requirement? If so, how many? Are temporary employees entitled to a bonus?
3. If a company is making a loss in the first year or first four years, would a bonus become applicable? If yes, what percentage?
4. In which accounting year must a bonus be paid, and by what date?
5. What is the range of the bonus amount, from the minimum to the maximum?
6. Would a salary of more than $10,000 or $15,000 per month be eligible for a bonus payment?
7. For those earning over $10,000 per month, is it mandatory to be paid as ex-gratia instead of a bonus?
8. Can a bonus be included in the employee's CTC and paid in the employee's monthly salary, with a minimum of 8.33%?
9. In the event of employee misconduct, can a bonus be held back or adjusted in the employee's dues in their full and final settlement?
Appreciate your response against each of these questions.
Regards,
Chandrasekar
Regional Manager - India
From India, Chennai
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An Act to provide for the payment of bonus to persons employed in certain establishments on the basis of profits, production, or productivity, and for matters connected therewith.
As per the Bonus Act 1965, the bonus is always distributed for the previous year. If your company has just finished one accounting year, it means that the payment of bonus will be distributed in the next accounting year, hence not applicable. The minimum requirement is 20 employees. It depends on the contract or if you are included in the payroll; otherwise, it is not applicable.
If a company incurs losses for up to 5 years, there is no requirement to distribute bonus. After five years, if the company is still under losses, the Board for Industrial and Financial Reconstruction (BIFR) will audit the company to determine if it is sick or not. If deemed sick, the company must pay bonus after selling some part of the company's property. Bonus for the last year is paid 8 months after the end of the accounting year.
The bonus percentages are as follows:
- Minimum: 8.33%
- Maximum: 20%
For amounts exceeding 10,000, you have to pay Ex-Gratia. Yes, you are free to do this. It depends on you, but the employee is entitled to the bonus. According to the act, if the employee has worked for 30 days in the previous accounting year, they are entitled to a bonus.
From India, Mumbai
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5As per the Bonus Act 1965, the bonus is always distributed for the previous year. If your company has just finished one accounting year, it means that the payment of bonus will be distributed in the next accounting year, hence not applicable. The minimum requirement is 20 employees. It depends on the contract or if you are included in the payroll; otherwise, it is not applicable.
If a company incurs losses for up to 5 years, there is no requirement to distribute bonus. After five years, if the company is still under losses, the Board for Industrial and Financial Reconstruction (BIFR) will audit the company to determine if it is sick or not. If deemed sick, the company must pay bonus after selling some part of the company's property. Bonus for the last year is paid 8 months after the end of the accounting year.
The bonus percentages are as follows:
- Minimum: 8.33%
- Maximum: 20%
For amounts exceeding 10,000, you have to pay Ex-Gratia. Yes, you are free to do this. It depends on you, but the employee is entitled to the bonus. According to the act, if the employee has worked for 30 days in the previous accounting year, they are entitled to a bonus.
From India, Mumbai
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Dear Mr. Chandra,
The first 5 years are considered to be the infancy period; hence, payment of a bonus is not necessary. Once it is paid, even in the case of a loss, you have to pay a minimum of 8.33%, with a maximum of 3500 per annum.
Above a salary of 10000, the employee is considered non-eligible, and payment is not statutory or mandatory. If you wish, you can pay as ex-gratia.
Thank you,
Amar Abrar
From India, Lucknow
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The first 5 years are considered to be the infancy period; hence, payment of a bonus is not necessary. Once it is paid, even in the case of a loss, you have to pay a minimum of 8.33%, with a maximum of 3500 per annum.
Above a salary of 10000, the employee is considered non-eligible, and payment is not statutory or mandatory. If you wish, you can pay as ex-gratia.
Thank you,
Amar Abrar
From India, Lucknow
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