Statutory
Statutory bonus
Statutory bonus is the annual bonus employers with 20 or more employees must pay under the Payment of Bonus Act, between 8.33 and 20 percent of wages, to employees earning up to ₹21,000 a month.
Eligible employees must have worked at least 30 days in the year. The bonus is calculated on wages of ₹7,000 or the minimum wage, whichever is higher, so the minimum is usually around ₹7,000 a year.
It must be paid within eight months of the financial year end and reported in Form D.
In Indian payroll
Companies often pay it monthly as a salary component or with Diwali pay. Either way it must be traceable as bonus for the register.
What is Statutory bonus?
Statutory bonus is the annual bonus employers with 20 or more employees must pay under the Payment of Bonus Act, between 8.33 and 20 percent of wages, to employees earning up to ₹21,000 a month.
Why does Statutory bonus matter in Indian payroll?
Companies often pay it monthly as a salary component or with Diwali pay. Either way it must be traceable as bonus for the register.
Related terms
In Kuzhu
The Payroll module in Kuzhu is where Statutory bonus is handled, on the same employee record as everything else.
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