Is Your Monthly Bonus Subject to PF Deductions? Seeking Clarity on Vendor Payments

Dear Sir/Madam, Please clarify whether PF will be deducted from the bonus if paid on a monthly basis by the vendor.

Regards, Gaurav

Hi, No need to consider a monthly bonus for PF contribution. However, ESI will be applicable for a monthly bonus, and the payment mode is on a monthly basis. If the bonus is paid on a quarterly basis, ESI will not be applicable.

Apex Court Verdict on Payments and Provident Fund

As per the Apex Court verdict, any payments made on a regular basis, other than House Rent Allowance (HRA) (as per the definition of Basic) and production/productivity-related payments (bonus/incentive), will fall under the purview of Provident Fund (PF) and Employee State Insurance Corporation (ESIC).

Regards,
S K Bandyopadhyay (WB, Howrah)
CEO - USD HR Solutions
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