Bonus Calculation Slabs: Can Companies Use Different Rates for New and Existing Employees?

Bonus Calculation Slabs in Organizations

Whether two slabs are allowable for bonus calculation (e.g., 8.33% for new employees and 20% for continuing employees) within the same organization?

Quite possibly, it depends on the joining date of employees and the prevalent government rules. It also depends on management's policies.

Regards, Shane

Statutory Bonus and Slab Differentiation

In the case of a statutory bonus, you cannot differentiate (i.e., create two slabs) based on the principles under Article 15 of the Constitution of India. Where the statutory bonus is not applicable, you may create different slabs as per your preference.

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Bonus Payment Guidelines

The bonus payment is a very sensitive issue. However, as per the act, the bonus payment and rules are as follows:

• Bonus should be calculated from April to March of any year.

• If a person joined in between, just calculate the bonus as = (salary/12) * number of months working between April to March.

• Some companies have the bonus as part of the CTC of the employee.

If I am wrong anywhere, please correct me. I will appreciate it.

Thanks

Dear All,

Currently, we are calculating bonuses in the CTC (Cost to Company) structure. However, four to five years ago, we used to calculate bonuses based on the Company's Profit, ranging from a minimum of 8.33% to a maximum of 20% of the Basic Rs. 3500, which was reimbursed within 8 months after the completion of the financial year. This is the actual reimbursement rule.

Thanks,
Regards,
J.N. Modi

An employee worked for 1.5 years and left 1 month before the bonus month. Can he be eligible for the bonus?

Regards