Is Voluntary Bonus Payment Subject to Statutory Compliance for Companies with Over 20 Employees?

Hello Friends,

I would like to know if, in the case where a company has more than 20 employees but their salary is less than 10K, statutory bonus is not applicable. However, if the company pays voluntarily, is it mandatory to comply with various statutory returns (e.g., annual returns)? If yes, why?

Thanks in advance

If you employ 20 employees, then you are expected to give bonuses to employees as per the Payment of Bonus Act. If none of the employees qualifies for a bonus due to all employees receiving a salary of more than Rs 10,000, you need not pay a bonus but you have to file a nil return.

If you pay a bonus voluntarily, you may still file returns as prescribed under the Act. Payment of a bonus cannot be deemed a voluntary act on the part of the employer but should be the outcome of a settlement between employees and the employer. Moreover, the ceiling that determines whether an employee is eligible for a bonus or not is subject to change. Therefore, an employee who is presently out of coverage may become eligible later on.

Regards,

Madhu.T.K