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}

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%).

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.

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