Hi,

We have following queries:

1. The basis of bonus is 8.33% of Basic Salary max 20% of Basic ?

2. At present our company pays bonus equivalent to one months gross salary at the time of diwali and any person leaves the company before the diwali; the amount of bonus lapsed or not payable.

3. Can we add a proportionate part of bonus as part of CTC.

3. To exercise the legal compliance as well as the non payment of bonus for the leaving before diwali, can we exercise the following :

A. Payment of bonus with minimum % @ 8.33 of Basic and be part in the CTC and rest amount of gross salary can be payable as an incentive and this can be lapse if such employee leaves before diwali.

Please guide in this regard.

Aatish

Hi Aatish,

Yes minimum bonus paid is 8.33% of earned ( Basic+DA), over and above 8.33% generally considered as EX-Gratia amount.

If the employee has worked in previous financial year for which bonus is declared , then he / she is eligible to receive the minimum bonus. Company can pay only 8.33% which is minimum due to be paid even if company pays bonus to existing employees at say 18% or 20%.Over and above 8.33% is at the company's descrition whether to pay or not to pay.

Generally bonus is paid on earned ( Basic +Da), so according to me bonus can not be part of CTC. Performance linked Incentive instead can be part of CTC based on certain criteria ( fulfilling of certain % of target, KRA etc in given year )

Cheers,
Kamlesh