In order to have a consolidated view of Total Employee Cost, we recently re-structured the salary break-up of employees so as to include Stat. Bonus as one of the components. Is it legally correct?
From India, New Delhi
Your CTC has no legal value at all unless it is shown as the part and parcel of your offer to the employee.

Since, CTC is only a yearly basis projection of the overall per employee cost incurred by the employer in all respects including statutory and non-statutory items, no question of legality would arise if statutory bonus is included in it. But, the only question is how you would quantify bonus beforehand as it is relatable to the performance of the establishment in an accounting year.

From India, Salem
Dear Colleague,

As rightly stated by the learned member, CTC is not governed by any law. It has legal implications to the extent it is part of the contract letter.

CTC is a monetary liability of the employer in terms major components of salary, benefits and perquisites committed. Statutory minimum bonus is a part of CTC.

In fact , several recurring employee cost items are not included in CTC - Subsidized food, Subsidized transport, concessional sale of company's products, leave encashment etc, which should get legitimately included.

Regards,

Vinayak Nagarkar
HR and Employee Relations Consultant

From India, Mumbai

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