Bonus limit for HR Executive

min is 8.33% and max is 20%

Max limit for bonus is 20%

Dear All,
Going through all reply I want to add that as per Bonus Act,1965 -a special provision is given for payment of Bonus linked with performance, but for this agreement should be there with union and for valid agreement every agreement should be registered at Labour Dept. In explanation of this special clause it is clearly mentioned that performance based bonus should not be less then 8.33% and not more than 20%.
So it is cleared that Bonus given under Bonus Act whether linked with performance (under any agreement) or linked with profit -minimum limit is 8.33% and max is 20%. It can be shown in Form C.
Going beyond Act any organisation is free to give performance base bonus to its employees as per its own policy. Performance base bonus to HR executive may be 25% or any % age fixed by the management. It depends upon Organisation Policy.
Thanks,

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Anuj

hai deepak can you explain the formula for caliculating the bonus as per my knowledge (total wage on pertucular year)/(total number of days presented by employee)*8.33 is correct or not i have doubt about it

thanks for your Information bye

hai chandra bonus is given once in a year only

chanda
dipak is correct. u r messing all types of bonus.

Hello All,
I am agree with Deepak's explanation on Bonus. But I guess Chanda is having some different query. Unknowingly or I don't know, Bonus is mixed with Performance Pay. In our organization we call it Variable Pay (Performance Pay) and we get it every quarter, the calculation of this Pay is depends on the Team Performance. Sometimes it goes above 100% or below 90%, but this doesn't mean we are getting money beyond our CTC. Standard amount is fixed in CTC. Each quarter we get approx. 4-5K (Depending on performance). I don't know on what basis this amount is calculated and how it is distributed within a team. Every organization has their own policies.

Chanda,

If you are getting Bonus above 20%, then your organization might have different policies to handle it. I can give you example of my own. In Yr. 2006, I got bonus with the rate of 8.33% just because my basic salary was below 10K (monthly). Many employees in our organization didn't received it.
(FYI, I am from IT industry and sorry if the rules/processes/policies are different than production/manufacturing)

Please clear if I am wrong.

Thanks,
Kishor

CALCULATION OF BONUS:

The method for calculation of annual bouns is as follow:

1. Calculate the gross profit profit in the manner specified in-
   1. First Schedule, in case of a banking company, or
   2. Second Schedule, in any other case.
2. Calculate the Available Surplus.
   Available Surplus = A+B, where A = Gross Profit – Depreciation admissible u/s 32 of the Income tax Act - Development allowance - Direct taxes payable for the accounting year (calculated as per Sec.7) – Sums specified in the Third Schedule.
   B = Direct Taxes (calculated as per Sec. 7) in respect of gross profits for the immediately preceding accounting year – Direct Taxes in respect of such gross profits as reduced by the amount of bonus, for the immediately preceding accounting year.
3. Calculate Allocable Surplus
   Allocable Surplus = 60% of Available Surplus, 67% in case of foreign companies.
4. Make adjustment for ‘Set-on’ and ‘Set-off’. For calculating the amount of bonus in respect of an accounting year, allocable surplus is computed after considering the amount of set on and set offf from the previous years, as illustrated in Fourth Schedule.
5. The allocable surplus so computed is distributed amongst the employees in proportion to salary or wages received by them during the relevant accounting year.

In case of an employee receiving salary or wages above Rs. 2,500 the bonus payable is to be calculated as if the salary or wages were Rs. 2,500 p.m. only.

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With Love & Regards

Deepak Dwivedi..........


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"Do you dare to think beyond the limit, I do..."

Hi deepak,

as i said , in my company its not restricted to the limit of 20%. it totally depends upon the % which we score in our score card. please update me if there is any new policy/ rule appiled (specifically to score card system)

rgds,
deeps

Hi All !

Is there any exemption from maintaining the regsiters of Allocable Surplus & Set on / Set off, if the establishment is new, or there is Productivity Linked Bonus ?

Thanks,