Criminal Trident Pack: IPC, CrPC and IEA by Sr. Adv. G.S Shukla and Adv. Raghav Arora
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Avinash Kumar Sharma (Sr. Manager HR)     14 May 2016

Payment of bonus on monthly basis

Dear Members,

Managing Director of our company has proposed that he wants to pay 20% Bonus on monthly basis (with disbursement of salary). His motive is to attract new talent by increasing their cash in hand per month. He wants to pay as per latest amendment i.e. on limit of 7000. Now he has sought legal opinion from me whether we can pay 20% on monthly basis or we can only pay 8.33% on monthly basis. Please give your valuable advice on this matter.


Avinash Kumar 


 8 Replies

Kumar Doab (FIN)     14 May 2016

There is no mention in the act that Bonus can not be paid on monthly basis!

The principle behind fixing a minimum and maximum limit for payment of bonus is that the rate of bonus should not fluctuate widely from year to year.

The question that ususally arises is :  How can company calculate percentage of bonus to be paid in the starting of financial year!

It may become part of wages and ESI may have to be deducted.

A written communication for record or an agreement may be achived so as to avoid payment of bonus later after accounting year.

If employer is comfortable and wishes to pay then you may take care of the nitty gritty of the matter.

Indeed it may be good intention as envisaged by employer!


Avinash Kumar Sharma (Sr. Manager HR)     15 May 2016

Thanks Sir for your advice.

Kumar Doab (FIN)     15 May 2016

You are welcome.

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Smith Wonka   08 July 2016

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