Statutory compliance
Statutory Bonus
Bonus is often paid at Diwali, but the rules behind it are strict. We work out who is eligible and how much each person gets, keep the records and returns in order, and help you plan bonus into CTC.
Scope of work
What we do
- Eligibility checkWe identify which employees are eligible, based on their wages and the days they worked in the year.
- Bonus computationWe work out the bonus for each eligible employee within the minimum and maximum the Code sets, from the available surplus and any amounts carried forward from earlier years.
- Payment on timeWe make sure bonus is credited to each employee's bank account within the period the Code allows.
- Records and returnsBonus records kept, and bonus details reported in the returns the rules require.
- New establishmentsFor businesses in their first years, we apply the Code's special rules for new establishments.
- Bonus in CTCWe help HR build bonus into CTC so offers and actual payouts stay consistent.
- Inspections and noticesWe attend labour inspections and assessments with you and draft replies under the Code.
- Closures, mergers and union mattersWe guide you through the bonus side of closures, mergers, amalgamations and union settlements.
- UpdatesChanges in wage limits and rules explained as they are notified.
Is this for you?
Who needs this
- Manufacturers and traders with many employees within the bonus wage limit
- HR teams preparing the annual bonus run
- New businesses unsure whether bonus applies yet
- Companies restructuring salaries under the Labour Codes
Deadlines we keep
- Statutory bonusWithin eight months of the close of the accounting year
What you receive
- Employee-wise bonus computation
- Bonus records for your files and for inspections
- Bonus details ready for the annual return
- CTC working with bonus built in
Under the Labour Codes
Read the law
The chapters behind this service, in the official text with plain-English notes beside it.
Questions
Common questions about Bonus
Who is entitled to statutory bonus?
Employees whose wages are within the limit set by the government and who have worked at least 30 days in the accounting year. The wage limit is notified and revised from time to time, so check the current figure with us.
When must bonus be paid?
Within eight months of the close of the accounting year, credited to the employee's bank account. Many employers pay it before Diwali, which is fine as long as it falls within that period.
Does the new wage definition affect bonus?
Yes. Both eligibility and the amount turn on wages as the Code on Wages defines them, so the 50% rule can change who qualifies and how much they get. We recheck your bonus working against it.
We are a new business. Do we have to pay bonus?
In the first five accounting years after the year in which you start selling goods or services, bonus is payable only for a year in which the establishment makes a profit. After that the usual rules apply. We can confirm where you stand.
Can bonus be included in CTC?
Yes. Many employers show statutory bonus as part of CTC. We help you structure it so what is paid matches the law and your offer letters.
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