Longevity Bonus Confusion: How Do You Calculate It After 4 Years with Changing Salaries?

Longevity bonus is paid as 10% of yearly gross salary after completion of 4 years of service. If the yearly gross keeps on changing after appraisal every year, then how should the longevity bonus be calculated after the end of 4 years of service? Please advise.

Hi Sandip,

The issue is simple: with every increase in the yearly salary, a bonus of 10% should be added. The term "longevity bonus" can otherwise be called "Service weightage benefit."

Thank you.

Hi Venkata,

My question is, how do I calculate the bonus after 4 years? Since the gross salary changes every year, what will be the total bonus after 4 years?

Dear Sandip,

"Longevity Bonus" is a discretionary bonus paid by the employer to those employees who have rendered a long stretch of service in the same establishment. It can be in the form of a one-time lump sum payment or a certain percentage of their current salary or share certificates of a certain value. It is purely at the discretion of the employer to recognize the loyalty of such employees in serving the establishment for a substantial number of years.