Dear Sir,
During my audit, I am verifying the bonus payable for the year 2008-09, which is payable during the financial year 2009-10. Please clarify my following doubts regarding bonuses payable to employees:
1. Who is eligible for getting a bonus?
2. What are the minimum and maximum limits of salary for getting a bonus?
3. What is the percentage of the bonus?
4. Is the bonus calculated on the basic or the gross salary, which includes all types of allowances?
5. What is the calculation procedure for the bonus?
Please clarify the above doubts as per the latest amendments, i.e., amendments relating to the above said financial year. Please do the needful.
Thanks & Regards,
Chakravarthy TPSR
From India, Gurgaon
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During my audit, I am verifying the bonus payable for the year 2008-09, which is payable during the financial year 2009-10. Please clarify my following doubts regarding bonuses payable to employees:
1. Who is eligible for getting a bonus?
2. What are the minimum and maximum limits of salary for getting a bonus?
3. What is the percentage of the bonus?
4. Is the bonus calculated on the basic or the gross salary, which includes all types of allowances?
5. What is the calculation procedure for the bonus?
Please clarify the above doubts as per the latest amendments, i.e., amendments relating to the above said financial year. Please do the needful.
Thanks & Regards,
Chakravarthy TPSR
From India, Gurgaon
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Dear Chakravarthy TPSR,
Please go through The Payment of Bonus Act, 1965 and the Rules made thereunder for all of your queries.
With Regards,
R.N.Khola
From India, Delhi
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422Please go through The Payment of Bonus Act, 1965 and the Rules made thereunder for all of your queries.
With Regards,
R.N.Khola
From India, Delhi
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Dear Mr. Chakarvarthy TPSR,
As per The Payment of Bonus Act, 1965 -
Sec 8 - Eligibility for bonus: Every employee shall be entitled to be paid by his employer in an accounting year, bonus, in accordance with the provisions of this Act, provided he has worked in the establishment for not less than thirty working days in that year.
Sec 9 - Disqualification for bonus: Notwithstanding anything contained in this Act, an employee shall be disqualified from receiving a bonus under this Act if he is dismissed from service for:
(a) fraud; or
(b) riotous or violent behavior while on the premises of the establishment; or
(c) theft, misappropriation, or sabotage of any property of the establishment.
Sec 10 - Payment of minimum bonus: Subject to the other provisions of this Act, every employer shall be bound to pay to every employee in respect of the accounting year commencing on any day in the year 1979 and in respect of every subsequent accounting year, a minimum bonus which shall be 8.33 percent of the salary or wage earned by the employee during the accounting year or one hundred rupees, whichever is higher, whether or not the employer has any allocable surplus in the accounting year. Provided that where an employee has not completed fifteen years of age at the beginning of the accounting year, the provisions of this section shall have effect in relation to such employee as if for the words "one hundred rupees", the words "sixty rupees" were substituted.
Sec 11 - Payment of maximum bonus: Where in respect of any accounting year referred to in section 10, the allocable surplus exceeds the amount of the minimum bonus payable to the employees under that section, the employer shall, in lieu of such minimum bonus, be bound to pay to every employee in respect of that accounting year a bonus which shall be an amount in proportion to the salary or wage earned by the employee during the accounting year subject to a maximum of twenty per cent of such salary or wage.
Sec 12 - Calculation of bonus with respect to certain employees: Where the salary or wage of an employee exceeds Rs. 2,500 per mensem, the bonus payable to such an employee under section 10 or, as the case may be, under section 11, shall be calculated as if his salary or wage were Rs. 2,500 per mensem.
The Payment of Bonus (Amendment) Ordinance 2007 - effective from 1st April 2006 -
(i) Sec 2(13) has been amended whereby the salary or wages ceiling for coverage under the Payment of Bonus Act, 1965 has been revised from Rs. 3500 to Rs. 10,000 per month.
(ii) Sec 12 has been amended whereby if the salary or wages of an employee exceed Rs. 3500 per month, the bonus payable to such an employee shall be calculated as if the salary or wages were Rs. 3500 per month.
Sec 14 - Computation of the number of working days: For the purposes of section 13, an employee shall be deemed to have worked in an establishment in any accounting year also on the days on which:
(a) he has been laid off under an agreement or as permitted by standing orders under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Industrial Disputes Act, 1947 (14 of 1947), or under any other law applicable to the establishment;
(b) he has been on leave with salary or wage;
(c) he has been absent due to temporary disablement caused by an accident arising out of and in the course of his employment; and
(d) the employee has been on maternity leave with salary or wage during the accounting year.
I hope all your queries have been cleared.
Regards,
Vijay Pandey
From India
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As per The Payment of Bonus Act, 1965 -
Sec 8 - Eligibility for bonus: Every employee shall be entitled to be paid by his employer in an accounting year, bonus, in accordance with the provisions of this Act, provided he has worked in the establishment for not less than thirty working days in that year.
Sec 9 - Disqualification for bonus: Notwithstanding anything contained in this Act, an employee shall be disqualified from receiving a bonus under this Act if he is dismissed from service for:
(a) fraud; or
(b) riotous or violent behavior while on the premises of the establishment; or
(c) theft, misappropriation, or sabotage of any property of the establishment.
Sec 10 - Payment of minimum bonus: Subject to the other provisions of this Act, every employer shall be bound to pay to every employee in respect of the accounting year commencing on any day in the year 1979 and in respect of every subsequent accounting year, a minimum bonus which shall be 8.33 percent of the salary or wage earned by the employee during the accounting year or one hundred rupees, whichever is higher, whether or not the employer has any allocable surplus in the accounting year. Provided that where an employee has not completed fifteen years of age at the beginning of the accounting year, the provisions of this section shall have effect in relation to such employee as if for the words "one hundred rupees", the words "sixty rupees" were substituted.
Sec 11 - Payment of maximum bonus: Where in respect of any accounting year referred to in section 10, the allocable surplus exceeds the amount of the minimum bonus payable to the employees under that section, the employer shall, in lieu of such minimum bonus, be bound to pay to every employee in respect of that accounting year a bonus which shall be an amount in proportion to the salary or wage earned by the employee during the accounting year subject to a maximum of twenty per cent of such salary or wage.
Sec 12 - Calculation of bonus with respect to certain employees: Where the salary or wage of an employee exceeds Rs. 2,500 per mensem, the bonus payable to such an employee under section 10 or, as the case may be, under section 11, shall be calculated as if his salary or wage were Rs. 2,500 per mensem.
The Payment of Bonus (Amendment) Ordinance 2007 - effective from 1st April 2006 -
(i) Sec 2(13) has been amended whereby the salary or wages ceiling for coverage under the Payment of Bonus Act, 1965 has been revised from Rs. 3500 to Rs. 10,000 per month.
(ii) Sec 12 has been amended whereby if the salary or wages of an employee exceed Rs. 3500 per month, the bonus payable to such an employee shall be calculated as if the salary or wages were Rs. 3500 per month.
Sec 14 - Computation of the number of working days: For the purposes of section 13, an employee shall be deemed to have worked in an establishment in any accounting year also on the days on which:
(a) he has been laid off under an agreement or as permitted by standing orders under the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946), or under the Industrial Disputes Act, 1947 (14 of 1947), or under any other law applicable to the establishment;
(b) he has been on leave with salary or wage;
(c) he has been absent due to temporary disablement caused by an accident arising out of and in the course of his employment; and
(d) the employee has been on maternity leave with salary or wage during the accounting year.
I hope all your queries have been cleared.
Regards,
Vijay Pandey
From India
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Dear all,
Everyone is eligible for a bonus, which should be calculated based on (Basic+DA). The minimum percentage is 8.33. The calculation is based on (Basic+DA); if it is less than Rs. 3500, but if it exceeds Rs. 3500, the benchmark value is Rs. 3500.
The formula for calculating the bonus is as follows: Bonus to be paid = (Basic+DA) * 8.33% * (number of months of service). Note that this bonus is applicable to employees who work a minimum of 30 days. The maximum bonus amount could be Rs. 8400.
From India, Warangal
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Everyone is eligible for a bonus, which should be calculated based on (Basic+DA). The minimum percentage is 8.33. The calculation is based on (Basic+DA); if it is less than Rs. 3500, but if it exceeds Rs. 3500, the benchmark value is Rs. 3500.
The formula for calculating the bonus is as follows: Bonus to be paid = (Basic+DA) * 8.33% * (number of months of service). Note that this bonus is applicable to employees who work a minimum of 30 days. The maximum bonus amount could be Rs. 8400.
From India, Warangal
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