What is meant by advance statutory bonus in Cognizant?

Advance statutory bonus is a type of bonus paid to the employee in advance. The statutory bonus is paid according to the 1965 Act of Payment of bonus. The statutory bonus is paid at a minimum rate of 8.33\% on salary to a maximum of 20\%.

What is advance against statutory bonus?

Advance statutory bonus is a type of bonus paid to the employee in advance. Employees that are eligible for statutory bonus are the persons who do not draw monthly wage beyond 10000. Statutory bonus which is to be paid is calculated according to the available surplus and may vary between 8.33\% to 20\%.

Is advance statutory bonus paid every month?

So what I receive as “Advance Bonus” is actually a fixed salary component payable each month. And such a fixed component being paid month-on-month should be treated as a wage component. So should I be receiving Statutory Bonus Payment as per Payment of Bonus Act 1965.

How is statutory bonus calculated?

21,000 employers are liable to pay bonus. Calculation of bonus will be as follows: If Salary is equal to or less than Rs. 7000/- then the bonus is calculated on the actual amount by using the formula: Bonus = Salary x 8.33/100.

Is statutory bonus fixed?

Statutory bonus India CTC employees have a fixed compensation structure that includes several components where the gross salary is much higher than the minimum wage. 6800 x 20\% = 1360 (16320 p.a.) 6800 x 8.33\% = 566 (6792 p.a.)

What is statutory bonus salary?

The minimum statutory bonus that an employer must pay an eligible employee is generally 8.33\% of the employee’s salary earned during the relevant accounting year and the maximum statutory bonus payable is 20\% of the employee’s salary earned during the accounting year.

What is the bonus limit?

The Lok Sabha has approved amendments to the Payment of Bonus Act that seeks to make more workers eligible for bonus by raising the monthly pay eligibility limit of employees to Rs 21,000 from Rs 10,000.

How is 2020 statutory bonus calculated?

The bonus will be calculated as follows: If salary is equal to or less than Rs. 7,000, then the bonus will be calculated on the actual amount by using the formula: Bonus= Salary x 8.33 / 100.

What is the limit for statutory bonus?

20\%
The minimum bonus of 8.33\% is payable by every industry and establishment under section 10 of the Act. The maximum bonus including productivity linked bonus that can be paid in any accounting year shall not exceed 20\% of the salary/wage of an employee under the section 31 A of the Act.

Is statutory bonus taxable?

As per the provision of the Income Tax Act, 1961, the amount of compensation due or received by an employee from his employer in connection with an employment shall be taxable as salary in the hands of the employee.

Is statutory bonus part of PF?

It excludes dearness allowance, houserent allowance, overtime allowance, bonus, commission or any other similar allowance payable to the employee in respect of his employment or of work done in such employment.

What does it mean to be eligible for statutory bonus?

It means that any employee whose basic is less than or equal to 10,000 is only eligible for statutory bonus. Also employee who is eligible for statutory bonus, his bonus is calculated @ minimum 8.33\% or maximum @ 20\% of Basic depending upon profitability of company.

What are the different types of bonuses available?

There is no two different Bonus available. Whatever Bonus being paid (Minimum 8.33\% & Maximum 20\%) by the companies are paid as per the Statutory requirement. The Bonus may be stated as Ad-hoc Bonus, Productivity Linked Bonus, attendance Bonus, etc., Bus all are being given as a part of Statutory compliance.

What is the maximum amount an employer can pay for bonus?

It is pertinent to note that the Act stipulates an upper limit of 20\% of the salary or wage earned by the employee during an accounting year for the payment of maximum bonus. If the gross earning of your employees is below Rs. 21,000 employers are liable to pay bonus.

Can a bonus be claimed as a perquisites?

All amounts payable to the employee as bonus under the provisions of the Act should be paid in cash. Which means that the employer cannot guise bonus as perquisites or allowances. Statutory Bonus should be paid within 8 months of closing the book of accounts.