Nagarkar Vinayak L
Hr And Employee Relations Consultant
Manojkamble
Sr. Hr Executive
Bijay_majumdar
Freelancer In Hr &indirect Taxes For
Nrvyas
Hr Consultant
+1 Other

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One of the company deduct sum amount (8.33% of basic amt) under the head "Statutory Bonus", print on payslips and the same is disbursed as "Due Statutory Bonus" for completed accounting year. Is this a correct/valid practice?
I believe this is not correct/ valid practice. Please share your opinion, with reason to support your comment.

From India, Visnagar
Dear Colleague, If the deduction is from gross payable salary, it is outright illegal. Statutory Bonus is to be paid to the employee and not deducted. Regards, Vinayak Nagarkar HR- Consultant
From India, Mumbai
Dear Nrvyas,
It is a logical problem for some organization when they arrive from CTC to monthly gross salary. Suppose for one employee in any organization CTC is INR 3,00,000/- per year. There are components like yearly( Bonus etc.) as well as monthly ( Employers' portion of PF & ESI cintribution etc. ). Now monthly gross is a statutory component which is required for different reasons consisting of Basic, DA, HRA, Other allowances etc.
Depending on remuneration structure of the organization, it is essential to arrive at monthly gross first from CTC level by deducting different elements of remuneration e.g. Gratuity, Bonus, EMPR portion of PF,ESI etc. etc. which may appear the INR 3,00,000/- CTC per year to INR 20k as monthly gross. Thereafter, after deducting employee portion of PF,ESI,PTAX, ITAX if any to pay the net salary.
Therefore, question of deducting all above( Bonus, gratuity etc.) from monthly gross will not arrise rather which has already been deducted from CTC will be paid without disturbing CTC.
Trust this will satisfy the query.
Thanks & Regards,
S K Bandyopadhyay( Howrah, WB )
USD HR Solutions
+91 98310 81531

USD HR Solutions – To Strive towards excellence with effort and integrity

From India, New Delhi
Dear NrVyas,
Yes, many companies follows the same practice but they do not deduct or show under deduction from the gross salary and is shown under your CTC bracket. Thus please confirm on the same. Secondly, it is ok to pay at 8.33% of basic till the time basic is not less than Rs. 7000/-.


Bonus is payable and not deductable.It forms the part of CTC,meaning cost to company.It therefore can not be deducted and shown across salary slip.
The bonus amount is calculated and mentioned ctc which can be paid towards the end of the year.

From India, Vadodara
Mr.S K Bandyopadhyay is right.To inflate CTC , large number of companies are including Bonus, PF etc-( employers contribution ) .One has to read the fine print.
It can not be termed as illegal -may not be ethical but is prevalent.
Col.Suresh Rathi

From India, Delhi
Absolutely Right , i agree with with Mr. Bijay "Bonus is payable and not deduct able. Many Company never shows it in your salary slip , only at a time of joining when you got appointment letter & salary annexure only that time employer shows your bonus part. it is ok to pay at 8.33% of basic.
From India, Delhi
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