Reply To: Annual Bonus for Employees and Income Tax Calculation with Bonus

[Sujit Manoharan]

#22276

Hi Prashant. A bonus payment is usually made to employees in addition to their base salary as part of their salary. While the base salary usually is a fixed amount per month, bonus payments more often than not vary depending on known criteria, such as the annual turnover, or the net number of additional customers acquired, or the current value of the stock of a public company. Thus bonus payments can act as incentives for managers attracting their attention and their personal interest towards what is seen as gainful for their companies’ economic success.