Should We Pay the Contractor's Bonus Now or Wait Until Next Year?

Our institute paid the bonus from September 2011 to August 2012 in October 2012. Now, the contract is terminating in December 2012. The contractor has submitted a bonus bill for September 2012 to November 2012 in December 2012. Should we pay the bonus now or wait until the next bonus period (October 2013)? Please advise.

Bonuses will be paid to the regular employees of the contractor based on the profits-allocable surplus of the employer-contractor. You should pay the bonus if the contract labor works more than 30 days in the respective financial year. However, the bonus for the stipulated period (Sep 2012 - Nov 2012) will be paid in the calculated financial year only.

Thank you.

Thank you for your advice. One more clarification, please. What do you mean by the calculated financial year? Can we pay the bonus right now, or do we have to wait until next year?

Since the contract is being terminated, the employees are probably going to be terminated as well, and a full and final settlement needs to be done. While the bonus rules allow you to pay it in October 2013, the logistics will be a bit challenging as you will have to find all of those people and pay them, all for approximately Rs. 600 each. If he fails to pay, you as the principal employer will be liable to pay with interest and penalties.

In light of all this, it's not worthwhile trying to delay it until October 2013. You may as well clear it now.