Understanding Bonus Deductions: Is It Just a Cut or Is There More to It?

Hello Everyone,

An employee has his/her bonus deducted from their CTC salary. I want to know, at the time of the bonus, what bonus he/she gets. Is it a deduction only or a deduction along with the bonus given by the company?

Bonus Regulation under the Payment of Bonus Act

Bonus, in general, is regulated under the Payment of Bonus Act. It may be a part of the Cost to Company (CTC) but should not be included in the monthly gross salary. In the specific situation at hand, a certain bonus amount was considered as a component of the CTC, and subsequently, the organization may declare a different percentage of bonus. According to the Payment of Bonus Act, only one bonus is required to be paid, as finally declared by the organization.

Profit-Sharing Bonus

If the organization provides another type of bonus, such as a profit-sharing bonus, it will be separate and unrelated to the Payment of Bonus Act.

Regards, S K Bandyopadhyay (WB, Howrah)

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I am working with a company with headquarters in Mumbai and a manufacturing setup in Umbergaon. I have tried all the contact numbers on the website, but there has been no response.

Query regarding the appointment of labor through a contractor

The contractor supplies labor and charges us for the same in the monthly bill (wages + PF). I have a query about bonuses. It would be great if you could share your views/inputs. Are contract employees eligible for bonuses? If so, how much is the principal employer liable to pay if the contractor fails to do so? Is the bonus considered a liability of the principal employer if the contract agreement does not mention the 'bonus clause'?

I look forward to your reply.