Whether the Bonus is to be added to the CTC of any employee and is to be mentioned in the appointment letter?

Dear all, Please confirm whether the Bonus is to be added to the CTC of any employee and is to be mentioned in the appointment letter?
Please help by explaining the Bonus Rules as per Bonus Act.

Hi Neelima
Though the Act does not specify it to be part of CTC, the Company will not know how much profit it is going to get?
If the Company mention the same in CTC, it would be a parameter for the rest of employee and the same percentage is to be given.
It is the prerogative of the Management to decide, what percentage is to be declared towards Bonus. If there is any Union, it should be decided in negotiations with them.
Thanks
Suresh

Hi.. Neelima,
Bonus will be part of the CTC and it should be mentioned in appointment letter. I suggest: download "Bonus Act" from web and better go through the same. This will enhance your knowledge on this.. If you still need a "ready made" stuff, then please mail me.
Regards
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Hi,
In addition to the above please find attached the payment of bonus act also as mentioned above please be informed that you have to mention the bonus in the appointment letter if included in CTC.
Regards,
AJ

Bonus depends upon the profitability and productivity. These in turn depend on other factors- both internal and external- which are sometimes beyond the control of employer. In such circumstance, how can you fix a rate of bonus right at the time of appointment? You can not, but if you want to show a handsome amount as remuneration to the employee and if you want to attract employees by showing such huge figures, then you can show it in the CTC. But the practice of showing such kind of allowances and reimbursements should be discouraged at any cost.
Regards,
Madhu.T.K

I am in total agreement with Madhu.
Bonus to a large extent depends on variable factor. Only if a certain amount is guaranteed at end of stipulated time periods, should it be shown in CTC.
Regards

Hi
I agree with Shri Madhu. If you show bonus as part of CTC in your appointment order, it will become part of service conditions. In that case, if you reduce the quantum of bonus based on the performance of the company, the employee has the right to claim the same amount as it is part of the emoluments agreed by the employer. Hence it is better to mention that bonus will be paid as per the Payment of Bonus Act/Policy of the company to avoid future litigations.
Thanks & Regards
Kalyan R

Hi Madhu,
I am in total agreement with you but most of the MNC's now put up average bonus as a fixed amount and is included in the CTC as well. The variable bonus is then calculated according to the individual, team, department & company performances which is then paid later to the employee.
Since this practise is very prevelant nowadays the other companies can't afford to put up with a complete variable bonus as at the end of the day every candidate today is looking for a bigger paycheck.
This practise started about five years back during the campus interviews and hence has caught up the regular recruitment industry too.
Hence it has become too strong a factor to discourage since most of the corporates including the smaller ones have started practising it.
I am in for anything that benefits the candidate at the end of the day.
Regards,
AJ

Dear Madhu,
Thanks for ur suggestion, would like to know, whether or not the Bonus is mendatory. Is it not fixed between 8.33% to 20 % of Basic +DA depends on organisation as per the Payment of Bonus Act.
Best Regards
Deepak Dwivedi

Dear All,
In one of the company they are following under mentioned procedure for bonus please tell me whether it is ethical or not. At the time of conducting interview CTC is fixed at the certain amount and breakup is not told to employee then there is a deduction of certain amount from their CTC which is equal to the 8.33 % of Rs. 3500/- in the name of bonus and this amount is paid at the end of one year on the eve of diwali. Please tell whether it is right or wrong on the part of the company.
Vijay Shankar