Can My Employer Withhold My Bonus After Resignation? Seeking Advice on Bonus Forfeiture

I have worked in a company for 2 months where a yearly bonus was a part of my CTC, which was deducted from my monthly pay, i.e., ₹643 per month. As I have resigned from the company within 2 months with a notice period, they are not agreeing to pay the deducted bonus even though it's a part of my CTC.

Query Regarding Bonus Forfeiture

Please advise if, as per the bonus law, a company can forfeit the employee bonus that is a part of CTC and should be paid at the end of the year.

Regards

Clarification on Bonus Deduction

Usually, if the bonus is part of your salary and is included in the CTC, then it has to be paid. Check your appointment letter and share it with the seniors for a response.

You mentioned that the bonus is deducted from the salary. Is it shown in the payslip, or are you calculating it from the Salary Annexure provided to you?

Please clarify and provide more details to receive favorable replies from seniors.

The bonus you are referring to may not fall under the POB Act of 1965.

Regards,
Varghese Mathew

Dear Sir, Normally, a bonus will not be part of your settlement. It will be paid only after the bonus is declared by the company and paid to all existing employees. Some organizations call for an application from the employees, requesting them to send the bonus due to them for the period they have worked with the organization.

Regards,
R. Sitaram

Hi, I have worked in a company for 2 months where a yearly bonus was a part of my CTC, which was deducted from my monthly pay, i.e., ₹643 per month. As I have resigned from the company within 2 months with a notice period, they are not agreeing to pay the deducted bonus, even though it's a part of my CTC.

Please advise if, as per the bonus law, a company can forfeit the employee bonus that is a part of CTC and should be paid at the end of the year.

According to the Bonus Act, the employer has to pay the minimum bonus to resigned employees; it is mandatory. So, you can claim that.

I hope this helps! Let me know if you need any further assistance.

Regards,

Doesn't a yearly bonus mean that the employee should work for a year before they are eligible for it?

Thank you!

Eligibility for Bonus Payment Under the Bonus Act of 1965

According to the Bonus Act of 1965, Section 8 states that any employee who works for 30 days in a calendar year is eligible for a bonus payment. Therefore, you can claim this bonus as during the full and final settlement, the company should settle all dues such as the current month's salary, leave encashment, bonus, and gratuity (if the employee has completed 5 years of service).

Not necessary to work. Yearly calculation from Apr to Mar in the period of time, an employee who works will avail the bonus. The minimum bonus to be paid to employees is at least Rs.100 (for new joiners) or 8.33%.

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The statutory bonus is obligatory to be paid if you have served a minimum of 30 days in a calendar year. However, it is not obligatory to pay it along with your FnF. The company declares bonus payment within a maximum of 9 months of the completion of the fiscal year. Upon the declaration, it becomes obligatory to pay you the said bonus.

Please check your appointment letter. It is not based on performance, but rather paid half-yearly or quarterly.

Thank you for all the replies. I have already mentioned above that the deducted bonus was a part of my CTC, and as per the terms and conditions mentioned in the appointment letter, it is paid at the end of the financial year.

Concern About Bonus Payment

My concern is, should it be paid to the employee in full and final as per the Bonus Act if it's a part of the CTC and not a performance bonus that is disbursed at the end of the year?

Thanks and Regards,
Varun

It is not a performance bonus; it is a part of my CTC as per the annexure of the appointment letter, but the disbursed timing of the same is not mentioned in the appointment letter. Please suggest if the employer is acting against the law as it's part of my monthly salary and not based on performance, which should be paid only after the end of the year.

Thanks & Regards,
Varun

Understanding Variable Components in CTC

Actually, it is not called a bonus. It is referred to as a variable component of your CTC, which may or may not be paid by the company. In my company, the bonuses listed in the annexure are given according to the PMS, not based on the profit or loss of the company. It also complies with the POB Act.

Please provide me with your joining and leaving dates so that I can advise you on your bonus.

Understanding Salary and CTC Components

First, what is your salary? Pay, net of a bonus, is not applicable for anyone paid a wage/salary of more than $10,000 per month.

Clarifying CTC and Its Implications

Second, CTC is only an indicator of the total cost to the company in the normal course. You cannot enforce CTC unless specified in the appointment letter as a component of your salary.

Bonus and Salary Deductions

Third, it was never deducted from your salary. It is a part of the CTC but not a part of gross pay as it is not a monthly wage component. Most probably, you are not eligible for a bonus.