parduman Started The Discussion:
My company does not pay bonus to the employees whose salary is more that Rs. 10000.00 . They plea that these employees are not eligible for bonus as per bonus act (ceilig limit 10000.00) . Please guide me whether they can do this , if not , what should we do ?. So that we can get our right.
Dear Siva Kumar, But if employee basic salary is less than, 10,000..then on what percentage bonus will be paid..is it 20% on basic pay. Pls confirm Regards Priyanka
The ceiling salary for Bonus coverage is Rs. 10,000 and its general components are Basic+DA. But for Bonus payment, maximum salary is Rs. 3,500.
The allocable surplus will be distributed among the eligible employees. If it is 20% or above, the statutory bonus will be 20%. If it is 8.33% or below, the bonus should be 8.33%. If it is in between 8.33% and 20%, the actual percentage is to be paid.
Dear Parduman Kumar,
If as per the definition of the 'salary or wage' as defined under the Payment of Bonus Act, 1965 if your salary is more than Rs. 10,000 per month then you are not covered under the definition of the employee & hence you are not eligible to get benefit of this Act & accordingly you are not entitled to get bonus from the employer under this Act.According to the Payment of Bonus Act, 1965 they seems to be on right footing.
Skylark Associates, Gurgaon (Haryana)
Labour Law Consultants (m) +91 9810405361
Bonus will be caliculated based on earned Basic only.
Eligibility: who is drawing the basic salary less than 10,000/- then he is eligible for getting the Bonus.
Percentage of bonus: min8.33% and max20% (Employeer have rights to pay in between these min and max percentage)
Caliculation of Bonus:
Above criteria is eligible for Bonus if any body is eligible for bonus the caliculation is as follows
Let us assume Employer wants to pay 10%
Case 1: if employee basic salary is lessthan 3500/- then the bonus caliculation is 10% amount on cummulation of 12month earned basic.
for example basic salary is 2500 then (2500+2500+2215+2500+1820+.....+2500)*10%
case 2: If employee Basic salary is Graterthan 3500/- then bonus caliculation is
10% amount on 3500*12
for example basic salary is 4500 then (3500+3500+3500+....+3500)*10%
Note: if earned basic is graterthan 3500/- then consider basic salary is only 3500. If basic is lessthan 3500/- then consider actual basic as it is.
I hope you all understud with my examples other wise feel free to call.
I tried to read from different sources and this is what I understood as part of calculation
• If an employee earns more than Rs 10000/- pm as a part of wages or salary then he/she is not eligible for bonus.
• if pm wages are < 10000/- then the bonus calculation can be done as
First criteria is that every such employee should at least get 8.33% of his salary (basic+da) earned around the yr
= (Basic pm + DA pm )*8.33%*No of months of service
** basic +da can be taken as max Rs 3500/-
If employer wishes to give more than 8.33% of bonus then max percentage which can be used is 20%. In such cases the extra funds are allocated n if they fall anywhere b/w 8.33% or 20 % then that amount is paid. I f they are more than 20% then max limit is 20% only..
In case employer has fewer funds then too 8.33% of bonus should be paid.
Refer to the link http://www.icai.org/resource.../1872...cc_lec_ch3.pdf
Bare Act - The Payment of Bonus Act, 1965
First one has got various cases which make understanding clear...second one has got the nitty gritties of the act...
I hope I understood it right. Kindly correct me if anything has been stated wrong.
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