#They do it for achieving following purpose:
-In hand salary of employee will increase as we are paying statutory bonus up front on monthly basis.
-Company liability of bonus payment is taken care of.
Now the question is whether this is a right practice or not? If you go out to find out answer of this question you will get two opinions as follows:
1.Yes, we can do this as there is no mention in the act that we can not pay it on monthly basis.
2.No, we can not do this. How can company calculate percentage of bonus to be paid in the starting of financial year? Also when you pay any money on monthly basis it becomes part of your salary which means statutory bonus is yet to be paid. ESI will also be deducted on such payments.
In my view, I would not recommend to pay bonus on monthly basis as it can create problem in future and employer need to pay statutory bonus again.
28th September 2017 From India, Delhi
#Anonymousthank you amit.
Then you mean to say that employer also have right to include the bonus amount in the monthly gross pay slip.
28th September 2017 From India, Bengaluru