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

Hi

I went thru all posts and interestring articles.

I want to give some clarifications here.

1. There are two issues we handle in employment A. Contract with the employee
B. Statutory Benefits.

2. CTC falls under the term of individual contract.. Here, we commit to pay the individual a sum agreed as CTC including all benefits which includes statuory benefits.

3. Whether we indicate or not, we need to pay the statutory benefits as provided.

Let us examine the case of Bonus.

Generally Bonus is an annual amount payable to an employee.

This is guided by The Payment of Bonus Act

Whether we committ or not, this amount is paybale for these employees as per the Act.

Other who are not falling under this definition, will be guided by the individual contract. We generally say that Performance Bonus based on the performance will be paid every year. No committment of percentage is given here. It normally specifies maximum

during negotiations, indications are given that an employee might get 10 % to 50%( example) In this case minimum of 10% shall be paid If an organidation does not pay higher, it can not be construed as unethical.

Siva

Hi!
According to my understanding ,bonus can be part of CTC and otherwise also..one bouus is statutary bonus 8.33%,which has to b part of CTC as its a cost to the company,paid to employee at tne end of financial year or quaterly,depending on comapny policy and other could be performance bonus,subject to successful completion of project..
Statutary bonus has to be part of appt letter..
Regards
[Login to view]

Hi
Let us examine the concept of CTC . After all it is " Total Cost to the Company " which a Company incurs on a employee as employment cost. Components could be any.
Bonus will definitely be a part of CTC depending upon coverage and profitability i.e. [Login to view] maximum @20.00%.
Regards
Mohan.

In our organisation, bonus is a part of CTC. you can say it's a fixed bonus wherein every month the amount(so called bonus) is deducted from the employee's CTC. The accumulated amount is given during Diwali time.
But the amount given is not the whole , only the accumulated amount of the last financial year. That is the balance amont will be received by employees only when he leaves the organisation as a part of his full and final settlement.
Regards,
Khushboo

Hi Jadgeesh,
I am attaching herewith all the documents pertaining to salary.
I think this should be enough.
Regards,
AJ

Dear Friend,
Minimum wages is a statutory requirement to be followed by all employer under minimum wages act. It differs state to state and all state government fix it according to inflation in every six months. Minimum wages fixed according to nature of work of the employees.
thanks,
kumaran siva

Hi
Sec 2(21) of the Payment of Bonus Act defines Wages/Salary as all remuneration capable of being expressed in terms of money. In this case the employee crosses the ceiling contemplated in the Bonus Amendment Act. Hence he will not be entitled for statutory bonus.
Please correct me if I am worng.
Thanks & Regards
Kalyan R

In agreement with Siva and AJ, I would like to urge employees to make an effort in understanding your salary structures, and that the companies aren't following unethical practice if their employees are educated about their salary breakups before joining the company.
After all, "CTC" is construed on need basis, all throughout the world, with no single definition. :)
Its a common practice these days to make bonus, a part of the CTC, AKA "variable" component of salary. The company sets an upper limit to these Variable pays and if observed closely they are within the Govt. guidelines %age wise. It is adopted mainly as it helps in boosting employees to perform at their optimum levels in order to take home the 100% of the variable pay.

Dear Neelima,
Yes, if you have mentioned bonus in employment Letter than it will be a part of CTC. However, bonus is a part of CTC in any case as it is a cost that company has to pay to employee.
Thanks and Regards
Kuldeep

Dear Neelima,
As per bonus act the bonus is always a surplus amount of Balance sheet to be distributed amount the employees and vary from 8.33% to 20% we cannot add this in CTC as if company bear some losses in FY then it is not liability of company to distribute bonus and for New set up for preceding 5 years company is always in Infancy period and not liable to pay bonus to its employees