Hi, I am working in a publicly listed company. Earlier, I was receiving a gross salary of 25,000/-. Now, the company has changed my salary structure. They reduced my HR amount (affecting my income tax calculation) and added the same amount under the head of Interim Statutory Bonus. As a result, I am now receiving the same total amount of 25,000/-. Out of this, 22,500/- is salary and 2,500/- is the Interim Statutory Bonus.
Questions Regarding Salary Structure Changes
My questions are:
1. Is it possible to include the Interim Statutory Bonus as a part of the monthly salary?
2. Can a company reduce your previously decided gross salary and add the Interim Statutory Bonus to it so that you receive the same amount as before?
Thanks.
From India, Delhi
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Questions Regarding Salary Structure Changes
My questions are:
1. Is it possible to include the Interim Statutory Bonus as a part of the monthly salary?
2. Can a company reduce your previously decided gross salary and add the Interim Statutory Bonus to it so that you receive the same amount as before?
Thanks.
From India, Delhi
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Bonus Under the Payment of Bonus Act, 1965
The bonus under the Payment of Bonus Act, 1965, pertaining to an accounting year, is based on the annual performance of the establishment and the annual earnings of the employee under the head of "salary or wages" as defined under section 2(21) of the Act. Therefore, restructuring the salary or wages of the employee by altering the quantum of any allowance other than D.A. cannot impact the quantum of the bonus under the Act, apart from the application of the ceiling on salary.
Statutory bonus, whether interim or final, cannot form part of the monthly salary. Normally, the company should not reduce the existing salary through such restructuring. However, since the employee's salary remains above the salary limit even after the restructuring, there will not be any change in the quantum of his bonus.
From India, Salem
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6108The bonus under the Payment of Bonus Act, 1965, pertaining to an accounting year, is based on the annual performance of the establishment and the annual earnings of the employee under the head of "salary or wages" as defined under section 2(21) of the Act. Therefore, restructuring the salary or wages of the employee by altering the quantum of any allowance other than D.A. cannot impact the quantum of the bonus under the Act, apart from the application of the ceiling on salary.
Statutory bonus, whether interim or final, cannot form part of the monthly salary. Normally, the company should not reduce the existing salary through such restructuring. However, since the employee's salary remains above the salary limit even after the restructuring, there will not be any change in the quantum of his bonus.
From India, Salem
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