BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -A bonus is extra money that an employee receives on top of his or her wages or salary. The person may receive the extra payment for good performance. Sometimes, all employees in a company receive extra money at a certain time of the year. For example, if they get an extra payment at Christmas, it is a Christmas bonus.

Detailed explanation-2: -The Payment of Bonus Act, 1965 provides for a minimum bonus of 8.33 percent of wages. The salary limited fixed for eligibility purposes is Rs. 3, 500 per month and the payment is subject to the stipulation that the bonus payable to employees drawing wages or salary not exceeded to Rs.

Detailed explanation-3: -Compensation Expense This would make sense if the bonuses are given to employees in recognition of their work or performance. In this case, the bonuses would be considered a part of the employee’s compensation and would be reported as such on the company’s financial statements.

Detailed explanation-4: -What is a bonus scheme? A bonus scheme is a reward tool that provides a lump sum payment in return for meeting agreed objectives. The way schemes are designed often means that the value of the bonus is included in the targets that are set, which makes the scheme self-financing.