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Retention Bonus Formula:
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Retention bonus is a financial incentive offered to employees to encourage them to stay with the company for a specific period. It's typically calculated as a percentage of the employee's CTC (Cost to Company) and is common in industries with high turnover rates.
The calculator uses the retention bonus formula:
Where:
Explanation: The formula calculates the actual bonus amount by multiplying the CTC with the retention percentage (converted to decimal).
Details: Accurate calculation of retention bonus helps both employers budget appropriately for employee retention programs and employees understand their potential earnings. It's crucial for financial planning and compensation strategy.
Tips: Enter CTC in INR and retention percentage. Both values must be valid (CTC > 0, retention percentage between 0-100).
Q1: Is retention bonus taxable in India?
A: Yes, retention bonus is considered part of your salary income and is taxable under the head "Income from Salary" as per Indian tax laws.
Q2: When is retention bonus typically paid?
A: Retention bonuses are usually paid upon completion of a specified service period or at the end of a project, depending on the company's policy.
Q3: Can retention bonus be negotiated?
A: Yes, retention bonuses are often negotiable, especially for critical employees or in competitive job markets.
Q4: How does retention bonus differ from performance bonus?
A: Retention bonus is for staying with the company, while performance bonus rewards achieving specific targets or outstanding performance.
Q5: Are there any legal requirements for retention bonuses in India?
A: There are no specific legal mandates, but retention bonuses must comply with general employment contract laws and tax regulations.