Salary Breakup Confusion: Is Your Bonus Deduction Really Mandatory?

Salary Breakup and Bonus Deduction Inquiry

I have recently joined a company, and they provided me with a salary breakup sheet that mentions "Bonus deduction" from CTC. I am attaching the file for your reference. Can anybody confirm if this deduction is mandatory? Can a company make this kind of deduction without the employee's consent?

Please reply.

Regards,
Amee

As far as I can see, there is no deduction for a bonus, but it has been shown as a part of CTC (Cost to Company), and the company can include this in your salary. It doesn't mean that they are deducting anything from your salary; it is just a way to show the packages.

When you joined the company, did you negotiate for a "take-home salary"? If you are receiving what you asked for, then there should not be any problem with what the company shows in the deductions. Secondly, is the salary breakup as per the breakup given in your appointment letter? You need to clarify this as well.

Regards,
DVD

Because the bonus is included in the CTC, it might have been omitted from the salary since you will receive the bonus once a year, just like the other employees. Their action is correct.

Regards,
D. Gurumurthy
HR/IR Consultant

I agree with Mr. Gurumurthy. This is part of your CTC, but it will be given to you once a year as a bonus, which means next year along with other employees. They are right.

Regards,
Kamlesh Mehta
Asst. Mgr. Wage & Comp. Benefit

Generally, bonuses and performance-linked bonuses are paid by companies without deducting from employee salaries as per statutory provisions. Hence, your employer shows them as a cost to the company.

EPF and ESI Deductions

EPF at 12% will be deducted from your salary (Basic + DA), and the same amount of contribution should be paid by the company.

ESI at 1.75% will be deducted from your gross salary, and 4.75% of your gross salary should be contributed by your employer.

Please note that your employer shows the salary breakup as CTC, including bonuses, PLB, ESI, and PF, which will be paid by the company, i.e., the total cost invested by the company.

Regards,
RK

Bonus is a part of the salary/CTC. Somehow, I was asked what PLD is. It is not a part of CTC; it depends on your performance. If any employee does not play a good role in any organization, we can't pay them. This is a profitable part of an organization and is attractive to CTC. Physiologically, the candidate strengthens their wage sheet.

Regards,
Rajendra Prasad Pradhan
(Manager HR/Legal/IR)
PD HR Industrial Consultancy, Bhubaneswar
[Phone Number Removed For Privacy Reasons]

If I join a company where my CTC would be 2,10,000 INR, with 70% fixed and 30% variable components, I would like to understand the breakdown of my CTC. Could you provide me with a rough idea?

Thanks & Regards,
Satyendra Singh