Dear All, Can you please explain the difference between Bonus and Ex-Gratia.. Is any linkage between Gratuity & Ex-Gratia.. Your view on Superannuation.. Regards, Rahul
From India, Pune
3From India, Pune
Dear Rahul,
Bonus is an amount payable to a workers usually on the occassion of diwali under Payment of Bonus Act. Workers having the Salary upto 10000/- can be eligible for Bonus of Rs.3500/- maximum. the workers having salary more then 10000/- are not eligible for bonus.
Exgratia is an amount paid to workers(having salary more then 10000/-) as a good geasture on the occassion of Diwali. Employer is not liable to pay Exgratia but it is obligatory to pay Bonus.
Regards
Jaipal
From India, Pune
Bonus is an amount payable to a workers usually on the occassion of diwali under Payment of Bonus Act. Workers having the Salary upto 10000/- can be eligible for Bonus of Rs.3500/- maximum. the workers having salary more then 10000/- are not eligible for bonus.
Exgratia is an amount paid to workers(having salary more then 10000/-) as a good geasture on the occassion of Diwali. Employer is not liable to pay Exgratia but it is obligatory to pay Bonus.
Regards
Jaipal
From India, Pune
Good Answer and strictly applying the legal entity. But in other terms a portion of Bonus is called Ex-gratia and paid. This is done when management decide to pay Bonus over and above 8.33%. This is done considering certain un-certainties of profitability and to avert setting precedent of paying higher bonus in future.
Murugesan R
From India, Chennai
Murugesan R
From India, Chennai
Bonus is a payment made beyond the salary and perks and usually linked to productivity or performance. In the context of business, it literally means “Extra” which is more than regular salary or wage. It is a statutory obligation for an employer to pay the employees “Bonus” at a fixed rate
The minimum bonus amount must be at 8.33% and maximum must not go beyond 20% of employee’s wages.
Ex-gratia is given as a mark of compassion voluntarily. Usually for the employees who are not covered under the Bonus Act, Exgratia is paid.
Non profitable organizations such as Hospitals, Social work organizations, NGOs etc are not covered under Bonus Act, 1965.
Although for the employees who comes under the Bonus Act, if the employer wishes to pay the beyond 20% of wages, it is given in the name of Exgratia.
Circumstances where the Exgratia is paid:
Employer may wish to pay some amount (As acknowledgement of the worker’s contribution) out of the revenues of the firm in case the profits do not support to pay the bonus.
On completing a specific period of existence, executing a large export order or any other event which marks significance, employer may pay some amount as Exgratia.
Any other reason that is NOT a binding on the employer, but the employer "wishes" to make such a payment to employees.
When the employer wishes to pay the employees an amount after paying the maximum bonus of 20% on wages.
Can Exgratia be included in to annual CTC?
Annual CTC means the total cost incurred on an employee in a year. In a management perspective, the employer may consider it for arriving at a cost to employ so many employees at any given point of time. It is purely at the discretion of the management.
When you consider the character of the payment (being ex-gratia) it should not be a part of CTC. It may be so, in particular year when it is paid. If it is going to be recurred every month/year, it loses the character of being Exgratia and can be called as some other earning head which can be included in CTC and paid regularly.
From India, Indore
The minimum bonus amount must be at 8.33% and maximum must not go beyond 20% of employee’s wages.
Ex-gratia is given as a mark of compassion voluntarily. Usually for the employees who are not covered under the Bonus Act, Exgratia is paid.
Non profitable organizations such as Hospitals, Social work organizations, NGOs etc are not covered under Bonus Act, 1965.
Although for the employees who comes under the Bonus Act, if the employer wishes to pay the beyond 20% of wages, it is given in the name of Exgratia.
Circumstances where the Exgratia is paid:
Employer may wish to pay some amount (As acknowledgement of the worker’s contribution) out of the revenues of the firm in case the profits do not support to pay the bonus.
On completing a specific period of existence, executing a large export order or any other event which marks significance, employer may pay some amount as Exgratia.
Any other reason that is NOT a binding on the employer, but the employer "wishes" to make such a payment to employees.
When the employer wishes to pay the employees an amount after paying the maximum bonus of 20% on wages.
Can Exgratia be included in to annual CTC?
Annual CTC means the total cost incurred on an employee in a year. In a management perspective, the employer may consider it for arriving at a cost to employ so many employees at any given point of time. It is purely at the discretion of the management.
When you consider the character of the payment (being ex-gratia) it should not be a part of CTC. It may be so, in particular year when it is paid. If it is going to be recurred every month/year, it loses the character of being Exgratia and can be called as some other earning head which can be included in CTC and paid regularly.
From India, Indore
Dear All, Thnx for your reply. pls give some highlights on Superannuation and retirement benefit..
From India, Pune
From India, Pune
Dear Rahul,
Please find the details below:-
Bonus - it a compulsory amount that organizations have to pay it's employees every year despite of profit and loss. as per the labor law, 8.33% of basic to be paid every year.
Ex gratia - It solely depends on management discretion that they want to pay this amount to employee or not. Basically given to employees on profits.
there is no compulsion by labor law on it.
Gratuity - It is again specified in our labor law that any employee who spends more than 5 years in an organization, employer have to pay gratuity to them. it is given at the time of Full & Final settlement of the employee.
gratuity = last basic drawn X 15 X no. of years / 26
Superannuation - it is a retirement benefit given to the employees and not a government obligation.
From India, Delhi
Please find the details below:-
Bonus - it a compulsory amount that organizations have to pay it's employees every year despite of profit and loss. as per the labor law, 8.33% of basic to be paid every year.
Ex gratia - It solely depends on management discretion that they want to pay this amount to employee or not. Basically given to employees on profits.
there is no compulsion by labor law on it.
Gratuity - It is again specified in our labor law that any employee who spends more than 5 years in an organization, employer have to pay gratuity to them. it is given at the time of Full & Final settlement of the employee.
gratuity = last basic drawn X 15 X no. of years / 26
Superannuation - it is a retirement benefit given to the employees and not a government obligation.
From India, Delhi
Superannuation can be of 2 i.e.
1- Defined Contribution - Here we can define the contribution rates (Either of Employer and Employee or Employer) accordingly Employee will get the benefits at the time retirement.
2- Defined Benefits - Here We can choose the retirement benefits first accordingly we need to pay contribution.
From India, Kota
1- Defined Contribution - Here we can define the contribution rates (Either of Employer and Employee or Employer) accordingly Employee will get the benefits at the time retirement.
2- Defined Benefits - Here We can choose the retirement benefits first accordingly we need to pay contribution.
From India, Kota
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