From "sankatyal" : Dear Sir I am working with Pvt Ltd Company since Nine years.At present my monthly salary is Rs 18000.How can i calculate my bonus amount.
15th July 2009 From India, Kannur

vikrampaneri 18
Bonus to be paid under Payment of Bonus Act,1965 is to be calculated as under :

1. It depends upon the percentage on which your company wants to give bonus to its employees. Minimum bonus is 8.33% of basic salary earned during the accounting year and Maximum is 20% under the payment of Bonus Act,1965.

2. Eligibility : Bonus under Payment of Bonus Act,1965 is required to be to employees whose salary ( Basic) is of less than Rs.3500.00 per month during the accounting year for which bonus is to be paid.

3. Bonus is to be calculated for eligible employees assuming salary ( Basic) as Rs.2500.00 per month or less, if, it is less then Rs.2500.00

4.Multiply the yearly sum of salary thus worked out as per above clause 3 with rate of bonus. The figure is bonus payable to employee under the act.

BONUS CALCULATION PARAMETERS

CASE 1 BASIC LESS THAN EQUAL TO 3500 = BONUS=ACTUAL BASIC X (BONUS MONTHS) X 20%
CASE 2 BASIC MORE THAN 3500 UPTO 8400 = BONUS=Rs. 3500 X (BONUS MONTHS) X 20%, EXGRATIA=0
CASE 3 BASIC MORE THAN 8400 & LESS THAN 10000 = BONUS=Rs. 3500 X (BONUS MONTHS) X 20%, EXGRATIA= BASIC SALARY-8400
CASE 4 BASIC MORE THAN 10000 = BONUS = 0, EXGRATIA= 1 MONTH BASIC SALARY

CASE 5 BASIC CHANGES DURING YEAR
EX: 2300 to 3500 = BONUS=(2300Xmonths paidX20%) + (3500Xmonths paidX 20%), exgratia=0
EX: 3500 to 5000 = BONUS=(3500Xmonths paidX20%) + (3500Xmonths paidX 20%), exgratia=0
EX: 5000 6 mths to 8900 6 mths = BONUS=(3500*6*20%)+(3500*6*20%)=8400, exgratia= (8900*6/12)-(8400*6/12)=250
EX: 8900 4 mths to 12000 8 mths = BONUS=(3500*4*20%)=2800, exgratia= {(8900*4/12)-(8400*4/12)}+{(12000*8/120}
15th July 2009 From India, Udaipur
vijayahr9 3
exgratia is another name of Bonus. Now a days u wont find Bonus in most of the companies sal slip,, the term used now is Ex gratia... Am I right Vikram ???
24th September 2009 From India, Ahmedabad
shaileshonly 1
Hi,
I am senior software enginner in reputed IT company working for last 4 years.My Basic pay exceeds Rs.12000/ month.
How come my company is paying me Rs.80,000/- Bonus for current year.
They can do away with the bonus easily by saying no Bonus for Employee drawing basic above Rs. 10,000/-
Can somebody pls help me to understand the calculation.
I am not sure about the rate(8.33% or 20%).
27th April 2010 From India
ashokmbahr 16
Hi Shailesh,
Bonus is paid in current year but it is for how much days in last year employee worked. and the percentage of Bonus is depends upon Company or its management decision but the as per government rule they cant go below 8.33% or not more than 20% is the limit under these all have to calculate bonus.
Example:- employee have 6000 and he joined in 2010 in month of may-2010. then he will get the bonus in 2011 after completion of financial year march 31st. so formula is :
BAsic+Da/ # days in a Month x actual present days x 8.33% or 20%.
using above formula calculate per months at make final amount.
27th October 2012 From India, Kolhapur
pbskumar2006 368
Mr. Vikram ji, Will you please re-calculate the latest Bonus calculation as per new Bonus amendment. i.e. from Rs.10,000/- to Rs. 21000/- Regards, PBS KUMAR
25th March 2016 From India, Kakinada
Ubaid Raheman 21
Hello Everyone,

Amendment in The Payment of Bonus Act, 1965.

This is to inform you that both the Houses of the Parliament have passed the Payment of Bonus Act amendment Bill yesterday. As per the news broadcasted on Radio, the said bill has been passed with retrospective effect i.e. from financial year 2014-2015.

Prior to the said amendment, the employee was defined under section 2(13) which reads as under:

“employee means any person (other than an apprentice) employed on salary or wages not exceeding Rs.10,000/- per month in any industry to do any skill, manual, supervisory, managerial, administrative, technical or clerical work for higher or reward whether the terms of employment be expressed or implied”.

As per the amendment the salary/wage limit of Rs.10,000/- has been enhanced to Rs. 21,000/- per month. The nett financial impact of the same will be that those employees who are drawing salary/wages not more than Rs.21,000/- per month and those who are working in skill, manual, supervisory, managerial, administrative, technical or clerical work, will also be entitled to receive bonus henceforth.

Prior to this amendment as per section 12 where the salary/wages of an eligible employee exceeds Rs.3500/- per month (Rupees Three Thousand Five Hundred Only) the bonus payable to such employee under this act i.e. minimum @ 8.33% or maximum @20% as the case may be, was calculated as if salary or wages or such an employee was Rs.3500/- (Rupees Three Thousand Five Hundred Only).

In the aforesaid amendment the figure of Rs.3500/- (Rupees Three Thousand Five Hundred Only) has been increased to Rs.7,000/- (Rupees Seven Thousand Only) per month. Prior to the amendment the eligible employee was entitled to receive minimum bonus of Rs.3500/- per annum @ 8.33% and a maximum bonus of Rs.8400 (Rupees Eight Thousand Four Hundred Only) @ 20% as the case may be. Now the employer will have to pay minimum bonus of Rs.7,000 per annum @8.33% instead of Rs.3500 per annum and maximum bonus of Rs.16,800/- @20% instead of Rs.8,400/- per annum.

Since the amendment is with retrospective effect, for the financial year 2014-2015, the employer will have to pay difference between Rs.3500 and Rs.7000 per annum, in case the employer has paid minimum bonus @8.33% during the said financial year and in case if the employer has paid maximum bonus of Rs.8400 @20% during the said financial year, such a employer will have to pay the difference between Rs.8400 and Rs.16800/-. In all other cases the employer has to pay the proportionate difference, as may be the case.

In addition this, the employer will have to pay the bonus to those employees whose salary i.e. basic + DA was more than Rs.10,000 but less than Rs. 21,000/- per month during the said financial year 2014-2015.

Regards,

Ubaid Raheman.

Dy. Manager HR.
26th March 2016 From India, Mumbai
Nwagh 1
According to Section 12 of the Payment of Bonus Act, 1965 where the salary or wages of an employee exceeds Rs 3500/- per month, the Bonus payable to such employee under Section 10 or, as the case may be, under Section 11, shall be calculated as if his salary or wage were Rs 3500/- per month.
Therefore the ceiling on salary or wages on which Bonus is to be paid to employees under the Payment of Bonus Act is Rs 3500/- only.
26th March 2016 From India, Pune
avinash2329 4
Dear Ubaid Raheman
Please be informed that Keral High court has passed an order that the said amendment bill shall be w.e.f. FY 2015-2016 and the said bill is cancelled for FY 2014-2015. Court order copy is attached
26th March 2016 From India, Indore
Ubaid Raheman 21
Hi Avinash,
I gone through the Kerala high court order dt. 27/01/16, but I think its limits up to Kerala Sate only.
Because_
*Supreme court order applicable to all over India.
*Kerala Jurisdictions limits are limited to Kerala state only.
*Petitioners members are also from Kerala state only.
*In Kerala high court order newer said that its applicability to all over India.
Regards,
Ubaid Raheman.
28th March 2016 From India, Mumbai
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