Salary Structure Dilemma: Can Bonuses Be Part of Monthly Pay? Urgent Advice Needed

Dear Seniors,

Can a bonus be included in the monthly salary? I need to know this URGENTLY.

Regards,
Anuradha

Hi,

Bonus is turnover profit that a company shares with its employees. This can be shared as a "festival bonus" or Annual Bonus, whose percentage is fixed, minimum being 8.33% or Rs 2800 (as per Bonus Act). For CTC sake, the minimum annual bonus can be broken up and shown as a monthly component if it is a fixed one.

But I guess you are confusing it with Monthly Incentive, which is purely target-based and performance-driven. This cannot be clubbed with the salary component as it is a variable concept altogether.

Hope this is clear!

Regards,
VJ:-P

Dear Anuradha,

Bonus can be included in CTC. I have also consulted with the law experts. Don't worry, go ahead.

Gopi.K

Hi All,

Bonuses can be included as part of the monthly salary, but there are limitations. Employees who have a bonus of Rs.10,000 or less can receive it as a salary component.

If you need more clarity, please respond.

Regards,
Ramesh

Dear Anuradha,

You can show the bonus as a bonus, not as a festive allowance. Some companies pay bonuses to their employees on a monthly basis. Simply calculate it based on Basic DA x 8.33% for manufacturing companies. With the advent of the service sector and contract employment, it is beneficial legislation to ensure the payment of a minimum bonus of 8.33%.

Check whether the bonus is paid monthly or yearly, as it makes a difference in whether the employee receives the bonus or not. Go ahead and implement it. All the best.

Regards

Yes, it is implemented in D.A.E., in the name of PRIS, a performance-related incentive scheme.

I do not think a bonus can be paid on a monthly basis. For example, if I join a company in July 2010, I cannot be paid a bonus as part of my monthly salary because I have not worked in the previous financial year.

If you paid the bonus monthly, then you must deduct ESI as well.

Can we pay a bonus on a monthly basis to our contract manpower who are replaced every 6 months or whenever there is a need for a change, but with a minimum of 180 days in service?

Please share your opinion.