Joining Bonus Eligibility: Who Qualifies and How Does It Work?

Hi Tanuja, I request you to provide me with information on the joining bonus. Who is eligible to receive the same?

Thanks in advance.

No, Janardhan. It is about a joining bonus which is given to the employees upon joining.

There are no rules concerning joining bonuses or signing bonuses. Any company can draft its own rules for the same. Sometimes, the amount of notice period purchased is paid to the employee as a joining bonus upon joining. By whatever name it may be called, such a bonus is liable for tax in the hands of the recipient.

The Concept of a Joining Bonus

The concept of a joining bonus is practically applicable in advanced countries such as the US, Germany, etc., where you want to attract new entrants. We normally have a sufficient number of candidates available for our openings, provided the company is a standard one and the job requirements are not exceptional. Here, we offer a yearly bonus that is paid at the end of the year to encourage new employees to stay for a minimum period of one year after joining and to prevent an increase in the attrition rate. All bonuses, regardless of the name given to them, are taxable.

Regards