Hi All,
Please share information on the following points related to the Bonus Act:
1. What is the difference between statutory bonus and PLI-based bonus?
2. Also, suggest if both are mandatory to enforce in the organization and what is the calculation criteria.
3. Is there any requirement of records/registers that need to be maintained?
4. Which monthly/annual returns need to be filed?
With regards,
Ajay
From India, Chandigarh
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1Please share information on the following points related to the Bonus Act:
1. What is the difference between statutory bonus and PLI-based bonus?
2. Also, suggest if both are mandatory to enforce in the organization and what is the calculation criteria.
3. Is there any requirement of records/registers that need to be maintained?
4. Which monthly/annual returns need to be filed?
With regards,
Ajay
From India, Chandigarh
Acknowledge(1)Amend(0)
Statutory bonus and PLI-based bonus are distinct types of bonuses governed by the Bonus Act. Here's a breakdown of the key differences and requirements:
1. Statutory Bonus vs. PLI-Based Bonus:
- Statutory Bonus:
- Definition: Statutory bonus is a fixed percentage of an employee's salary mandated by law, typically calculated as a percentage of the basic wage.
- Mandatory: Statutory bonus is compulsory for organizations to provide as per the law.
- Calculation: It is calculated based on a predetermined formula specified in the Bonus Act.
- PLI-Based Bonus:
- Definition: PLI-based bonus, or Performance Linked Incentive bonus, is tied to individual or company performance metrics.
- Voluntary: PLI-based bonuses are usually discretionary and linked to achieving specific performance targets.
- Calculation: The calculation of PLI-based bonuses is directly linked to performance outcomes, such as sales targets, project milestones, or individual KPIs.
2. Enforcement and Calculation Criteria:
- Statutory Bonus:
- Enforcement: Statutory bonuses are mandatory for organizations with a certain number of employees, as per the Bonus Act.
- Calculation Criteria: The calculation is typically based on a fixed percentage of the employee's basic wage.
- PLI-Based Bonus:
- Enforcement: PLI-based bonuses are not mandatory and are usually performance-driven.
- Calculation Criteria: The criteria for calculating PLI-based bonuses vary and are based on achieving predetermined performance goals.
3. Record-Keeping:
- Statutory Bonus: Employers must maintain records related to the payment of statutory bonuses, including details of the calculation and disbursement.
- PLI-Based Bonus: Records of performance evaluations, targets, and bonus payouts should be documented for transparency and dispute resolution.
4. Monthly/Annual Returns:
- Organizations are required to file returns related to bonus payments as mandated by the Bonus Act. These returns typically include details of the bonus paid to employees during a specific period.
Ensure compliance with the Bonus Act and maintain accurate records to facilitate smooth operations and employee relations.
From India, Gurugram
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1. Statutory Bonus vs. PLI-Based Bonus:
- Statutory Bonus:
- Definition: Statutory bonus is a fixed percentage of an employee's salary mandated by law, typically calculated as a percentage of the basic wage.
- Mandatory: Statutory bonus is compulsory for organizations to provide as per the law.
- Calculation: It is calculated based on a predetermined formula specified in the Bonus Act.
- PLI-Based Bonus:
- Definition: PLI-based bonus, or Performance Linked Incentive bonus, is tied to individual or company performance metrics.
- Voluntary: PLI-based bonuses are usually discretionary and linked to achieving specific performance targets.
- Calculation: The calculation of PLI-based bonuses is directly linked to performance outcomes, such as sales targets, project milestones, or individual KPIs.
2. Enforcement and Calculation Criteria:
- Statutory Bonus:
- Enforcement: Statutory bonuses are mandatory for organizations with a certain number of employees, as per the Bonus Act.
- Calculation Criteria: The calculation is typically based on a fixed percentage of the employee's basic wage.
- PLI-Based Bonus:
- Enforcement: PLI-based bonuses are not mandatory and are usually performance-driven.
- Calculation Criteria: The criteria for calculating PLI-based bonuses vary and are based on achieving predetermined performance goals.
3. Record-Keeping:
- Statutory Bonus: Employers must maintain records related to the payment of statutory bonuses, including details of the calculation and disbursement.
- PLI-Based Bonus: Records of performance evaluations, targets, and bonus payouts should be documented for transparency and dispute resolution.
4. Monthly/Annual Returns:
- Organizations are required to file returns related to bonus payments as mandated by the Bonus Act. These returns typically include details of the bonus paid to employees during a specific period.
Ensure compliance with the Bonus Act and maintain accurate records to facilitate smooth operations and employee relations.
From India, Gurugram
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Amendment to Payment of Bonus Act 2015.jpg
Statutory Compliance of a Industrial or Commercial Unit.xls
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