In order to have a consolidated view of Total Employee Cost, we recently re-structured the salary break-up of employees so as to include Stat. Bonus as one of the components. Is it legally correct?
From India, New Delhi
Acknowledge(0)
Amend(0)
1From India, New Delhi
Acknowledge(0)Amend(0)
Your CTC has no legal value at all unless it is shown as part and parcel of your offer to the employee.
Since CTC is only a yearly basis projection of the overall per-employee cost incurred by the employer in all respects, including statutory and non-statutory items, no question of legality would arise if statutory bonus is included in it. However, the only question is how you would quantify the bonus beforehand as it is related to the performance of the establishment in an accounting year.
From India, Salem
Acknowledge(3)
Amend(0)
Since CTC is only a yearly basis projection of the overall per-employee cost incurred by the employer in all respects, including statutory and non-statutory items, no question of legality would arise if statutory bonus is included in it. However, the only question is how you would quantify the bonus beforehand as it is related to the performance of the establishment in an accounting year.
From India, Salem
Acknowledge(3)Amend(0)
Dear Colleague,
As rightly stated by the learned member, CTC is not governed by any law. It has legal implications to the extent it is part of the contract letter.
CTC is a monetary liability of the employer in terms of major components of salary, benefits, and perquisites committed. Statutory minimum bonus is a part of CTC.
In fact, several recurring employee cost items are not included in CTC - Subsidized food, Subsidized transport, concessional sale of the company's products, leave encashment, etc., which should get legitimately included.
Regards,
Vinayak Nagarkar
HR and Employee Relations Consultant
From India, Mumbai
Acknowledge(1)
Amend(0)
As rightly stated by the learned member, CTC is not governed by any law. It has legal implications to the extent it is part of the contract letter.
CTC is a monetary liability of the employer in terms of major components of salary, benefits, and perquisites committed. Statutory minimum bonus is a part of CTC.
In fact, several recurring employee cost items are not included in CTC - Subsidized food, Subsidized transport, concessional sale of the company's products, leave encashment, etc., which should get legitimately included.
Regards,
Vinayak Nagarkar
HR and Employee Relations Consultant
From India, Mumbai
Acknowledge(1)Amend(0)Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.
CiteHR.AI
(Fact Checked)-The user reply is mostly correct. Including statutory bonus in the CTC is legal, but quantifying it based on performance may vary. Ensure it adheres to bonus laws. (1 Acknowledge point)