Statutory Bonus

Dear All,

  1. What are the criteria to qualify for a Statutory bonus? Our Labour consultant cites that if the monthly basic is less than 21,000, then the employer must pay a statutory bonus between 8.33% - 20%. So, the eligibility is based on Monthly basic less than 21K or Gross pay less than 21K. Please clarify.

  2. What is the calculation used to calculate Stat Bonus and when should we pay this to eligible employees?

  3. What if an employee quits during the bonus period? Should the employer still pay the stat bonus?

  4. Can employers advance and pay this stat bonus, meaning can this Stat bonus be included as a monthly component and get paid to employees in advance?

  5. Can performance bonuses be tagged as Stat bonus payments to employees? If so, should the payslip reflect the component as a Stat bonus or Performance bonus?

  6. How are companies handling this stat bonus calculation while issuing the offer? Is it shown in the offer letter?

Apologies for too many questions.

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Hi jaishree,

It is monthly basic + DA if it is less than 21k you need to pay bonus to employee.

Employee will be eligible for bonus only if they have done more than 30 days service at office…

For employees relieving before end of the year bonus to be cleared on pro data basis

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That is correct and it should be on the Gross pay only but calculation will be on basic pay

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Please refer this article for clarity on statutory bonus.

https://www.greythr.com/hr-garden/bonus/#:~:text=Employees%20with%20a%20monthly%20salary,for%20the%20first%20five%20years.

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Thanks for your prompt response, Avils.

For employees relieving before the end of the year bonus to be cleared on a pro-data basis - when should this be paid, as part of final pay, or when we pay the bonus to all other eligible employees? Kindly clarify

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Thanks for your response.

That is correct and it should be on the Gross pay only but the calculation will be on basic pay - The article on the link provided says monthly salary less than 21K (basic + DA ) is eligible for bonus.

Please check - https://www.greythr.com/hr-garden/bonus/#:~:text=Employees%20with%20a%20monthly%20salary,for%20the%20first%20five%20years

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Adding to the question on statutory bonus, the bonus to be calculated on Gross Basic or on 7k ? Please clarify

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Dear Team,

How to attend this as receiving email but no idea how to attend.

REGARDS

GURUDAS S LADGAOKAR

HR MANAGER

1_PBML_Signature_Mumbai-01

1 Like

Dear Team,

How to attend this as receiving email but no idea how to attend.

REGARDS

GURUDAS S LADGAOKAR

HR MANAGER

9967590669

1_PBML_Signature_Mumbai-01

1 Like

Dear Madam,

If we are paying monthly bonus to employee whose Gross Salary is Rs.21000/- , how to do Bonus Annual Return.

Please guide as we have visited Labour Commissioner office at BANDRA , They are not accepting the documents.

REGARDS

GURUDAS S LADGAOKAR

HR MANAGER

9967590669

1_PBML_Signature_Mumbai-01

2 Likes

Dear All

  1. What is the calculation used to calculate Stat Bonus and when should we pay this to eligible employees? Bonus = (Average (Basic Salary+DA) in a Year x 8.33%) & is to be paid within 8 months from the close of the accounting year.

  2. What if an employee quits during the bonus period? Should the employer still pay the stat bonus? Yes on a Prodata basis to be paid

  3. Can employers advance and pay this stat bonus, meaning can this Stat bonus be included as a monthly component and get paid to employees in advance? We can include in the monthly salary Bonus 8.33% from the (Basic + DA)

  4. Can performance bonuses be tagged as Stat bonus payments to employees? If so, should the payslip reflect the component as a Stat bonus or Performance bonus? We can mention it as a Bonus instead of a Statutory Bonus / Performance Bonus.

  5. How are companies handling this stat bonus calculation while issuing the offer? Is it shown in the offer letter? Our organisation included for Third Party Contract - Offer Letter. I hope it’s not necessarily mentioned in the offer letter and it should be paid if the gross salary is less than Rs.21,000/-

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1.It is eligible if the employee basic salary is less than 21000 in a month and the calculation happens on the actual basic and the minimum wages whichever is high.

2.it should be paid post completion of the financial year but that too within eight months i.e. Nov.

3.Yes, if an employee quits during the year, it has to be made on a prorated basis.
4.Yes, the employer can create that component in part of the salary structure and make it a recurring payment.

5.No, statutory bonuses cannot be tagged or adjusted with any other bonuses.
6. It should be the over and above of employee CTC.

2 Likes

Dear All
As per the Payment of Bonus Act 1965, a Gross Salary less than Rs 21,000/- is eligible for a Bonus between 8.33% - 20%. The Minimum Bonus should be Rs. 7000/-
FYI

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Per the Payment of Bonus Act 1965, a Gross Salary less than Rs 21,000/- is eligible for a Bonus between 8.33% - 20%. The Minimum Bonus should be Rs. 7000/-

This part is too confusing. Some say an employee’s basic salary is less than 21000 while others say a Gross Salary is less than Rs 21,000. Which one is correct? Kindly advise.

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Dear Jaishree ,

Its on Gross salary

Thanks and Regards

Komalatha

A Meaningful Silence is always better than Meaningless words.

Pacs

PrincipleACS Engineering India Pvt Ltd

Plot No 58/A, Ground Floor Pavani Equinox ,

Road No 8 Jubilee Hills , Hyderabad- 500033 TS

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