Understanding Bonus Percentages: How Do Company Profits Influence Bonus Decisions?

Thank you for your response. Further to this, I wanted to ask: Can we pay the bonus between 8.33% to 20% based on the company's profitability? If so, how is the percentage of the bonus correlated to profitability? In other words, at what level of company profit can we decide on a 15% bonus?

Regards,
Minakshi

If your company does not have any allocable surplus, then your company must pay at least 8.33% of the bonus. The auditing might have been completed for the FY 2011-12, and the profit and allocable surplus might have been declared. If you ask your auditing team, they will guide you on the percentage of the bonus that can be paid. Please do put up the same to your management, get it approved, and start preparing the Form C (Bonus Register) and Bonus Voucher. Pay the bonus before 30th Nov 2012, so that you can avoid unwanted legal problems.

Regards.

Clarifications on the Payment of Bonus Act

Some of the clarifications and checklists on the Payment of Bonus Act may be useful for the HR fraternity. Please see the attachment.

Regards,
PBS KUMAR