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Christopher   29 December 2015

Variable incentives = bonus

Dear Learned, Pls throw some light whether we could term the variable incentives paid as statutory bonus. In general, these incentives are way higher than the statutory bonus. Under the Payment of Bonus act, is there any exemption from paying bonus to employees. Thanks in advance!


 2 Replies

kameswarao S (Head HR)     31 December 2015

Variable incentives are different from the Statutory Bonus and they are purely linked to the performance of the Organization & Individual.  The amount may vary from month to month / year to year and some times the employee may not get any amount in case the performance of the individual / company is not done well.

A minimum payment of 8.33% is mandatory as far as the Statutory Bonus is concerned.  In case you want to reduce the burden then you can cancel on that Variable incentive component for the employees who are going to join further but can not withdraw or adjust against any other component for the existing employees.

Kumar Doab (FIN)     01 January 2016

Various pros and cons of Variable Payouts have been understood by employees.


Variable payout is also fruit of labor like wages.

The matter has been contested by employees and a lot has been discussed on internet as well.

It was aimed to allure and retain employees.


A straight and clear payout without much hype and conditions  can succeed to retain the employees.

Statutory bonus can not be declined to eligible employees.




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