Wages for calculation (and also for deciding eligibility) mean total salary (gross salary) as per contract of employment. Since HRA, travelling allowances etc which are allowances given for some specific purposes are excluded from the scope of wages the practice is to calculate the amount of bonus on the basis of basic wages and dearness allowance alone.
But in a scenario when companies break up salary into various components so as to reduce the amount to the minimum possible extent, the wage which qualifies for bonus shall include gross wage also. It can be disputed in such cases where HRA is paid as part of salary even to an employee who resides in his own house or travelling allowance is paid to one who does not spend any thing for commuting to the office. It shall also be disputed if the organisation considers the gross salary for deduction of loss of pay for absence without leave.
Therefore, if you take gross salary for eligibility ( an employee is eligible to get bonus only when his salary is Rs 21000 or less than Rs 21000) you should take the gross salary for calculation of bonus also. At the same time, if you take basic salary (and DA if any) for deciding whether an employee should be paid bonus, then you can take that basic salary and DA for calculation of Bonus also. You cannot take the gross salary for deciding whether the employee comes under bonus purview and only basic salary for calculation.
At the same time, the Payment of Bonus Act itself has restricted the calculation f bonus on Rs 7000 even if the wages amount to Rs 21000. This base of Rs 7000 shall extend to the statutory minimum wages fixed for the industry. As per the Act, employees whose salary does not exceed Rs 21000 only are eligible to get bonus and in respect of such employees, bonus shall be calculated assuming that wages is Rs 7000 per month, in case the employee belongs to a category of employment for which no minimum wages has been fixed by the government and in respect of an employee in respect of whom minimum wages has been fixed by the government, bonus should be calculated on that minimum wages without reference to actual wages.
From India, Kannur
4193But in a scenario when companies break up salary into various components so as to reduce the amount to the minimum possible extent, the wage which qualifies for bonus shall include gross wage also. It can be disputed in such cases where HRA is paid as part of salary even to an employee who resides in his own house or travelling allowance is paid to one who does not spend any thing for commuting to the office. It shall also be disputed if the organisation considers the gross salary for deduction of loss of pay for absence without leave.
Therefore, if you take gross salary for eligibility ( an employee is eligible to get bonus only when his salary is Rs 21000 or less than Rs 21000) you should take the gross salary for calculation of bonus also. At the same time, if you take basic salary (and DA if any) for deciding whether an employee should be paid bonus, then you can take that basic salary and DA for calculation of Bonus also. You cannot take the gross salary for deciding whether the employee comes under bonus purview and only basic salary for calculation.
At the same time, the Payment of Bonus Act itself has restricted the calculation f bonus on Rs 7000 even if the wages amount to Rs 21000. This base of Rs 7000 shall extend to the statutory minimum wages fixed for the industry. As per the Act, employees whose salary does not exceed Rs 21000 only are eligible to get bonus and in respect of such employees, bonus shall be calculated assuming that wages is Rs 7000 per month, in case the employee belongs to a category of employment for which no minimum wages has been fixed by the government and in respect of an employee in respect of whom minimum wages has been fixed by the government, bonus should be calculated on that minimum wages without reference to actual wages.
From India, Kannur
For an employee with a Basic of 12k, will his Statutory Bonus be calculated on 12k or the Minimum wages applicable in the state?
From India, Gurgaon
From India, Gurgaon
If the minimum wages fixed by the government in respect of his type of employment is more than Rs 12000, then, obviously, his bonus should be based on that higher amount. For example, if the minimum wages fixed is Rs 18000, then he can get bonus as if his salary is 18000 per month
From India, Kannur
From India, Kannur
Bonus wil be calculated 8.33% on Basic(need to check with min wage act and also it wil vary according to the industry and Zone). not on gross. bonus will come under Statutory.
From India, Bangalore
From India, Bangalore
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