Dear Member,
Welcome to CiteHR.
If the salary or wages of an employee exceeds Rs. 10, 000/- per mensem as defined at section 2(21) of this Act then this employee will not be covered under the definition of employee as provided at sec. 2(13) for getting any benefit under this Act. Hence he is not eligible for getting bonus from his employer under this P B Act of 1965.
R.N.KHLOA|Sr.ASSOCIATE|LL&IR|
From India, Delhi
363Welcome to CiteHR.
If the salary or wages of an employee exceeds Rs. 10, 000/- per mensem as defined at section 2(21) of this Act then this employee will not be covered under the definition of employee as provided at sec. 2(13) for getting any benefit under this Act. Hence he is not eligible for getting bonus from his employer under this P B Act of 1965.
R.N.KHLOA|Sr.ASSOCIATE|LL&IR|
From India, Delhi
Dera Vibs,
Welcome to CiteHR.
If the salary or wage of an employee is upto Rs. 3500/- per month as defined by sec. 2(21) of this Act then he will be eligible to receive bonus from his employer on his actual salary or wages as per this definition.
Regards,
R N KHOLA
From India, Delhi
Welcome to CiteHR.
If the salary or wage of an employee is upto Rs. 3500/- per month as defined by sec. 2(21) of this Act then he will be eligible to receive bonus from his employer on his actual salary or wages as per this definition.
Regards,
R N KHOLA
From India, Delhi
Hi,
The same bonus act is applicable for all over india. There is no saperate act for individual state. We need to keep Max. Rs. 3500/- as ceiling while calculating the bonus.
As such there is No new ammendment has been passed by the government.
Regards
Harsha Shetty
From India, Bangalore
The same bonus act is applicable for all over india. There is no saperate act for individual state. We need to keep Max. Rs. 3500/- as ceiling while calculating the bonus.
As such there is No new ammendment has been passed by the government.
Regards
Harsha Shetty
From India, Bangalore
Dear All,
When i was being interviewed by HR Manager of Intas Pharmaceutical Ltd, i was being told that bonus to be paid by keeping allocable surplus in mind, and some company follows diff method all to gather.
Bonus is being paid on basic, 8.33%*12 comes to one salary, though it is paid only to those earning below 10,000/- P.M .
then how the people earning 25,000/- gets the bonus?
please explain me the same.
you can send me the detail on the mentioned email id.
From India, Ahmadabad
When i was being interviewed by HR Manager of Intas Pharmaceutical Ltd, i was being told that bonus to be paid by keeping allocable surplus in mind, and some company follows diff method all to gather.
Bonus is being paid on basic, 8.33%*12 comes to one salary, though it is paid only to those earning below 10,000/- P.M .
then how the people earning 25,000/- gets the bonus?
please explain me the same.
you can send me the detail on the mentioned email id.
From India, Ahmadabad
The Payment of Bonus Act, 1965
Objective of the Act : Until the Payment of Bonus Act was promulgated, bonus was linked to profits
meaning that if an establishment did not make profits in a certain year, the employer was not liable to pay bonus.
But the present Act however makes the employer liable to pay bonus to an employee as an annual statutory payments
irrespective of the existence of profits.
Applicability of the Act
The Act includes all employees, factory workers or clerical staff or executives, drawing wages or salary up to
Ten Thousand rupees per month, who perform any skilled, unskilled, manual, supervisory, managerial, administrative,
technical or clerical work.
Eligibility
To become eligible for bonus every employee must have worked in the establishment for not less than 30 working days
in the relevant accounting year.
Bonus is not payable
On subsistence allowance paid to an employee during the period of his suspension, since such employee did not
actually perform any work. Bonus can be forfeited if dismissal is for riotous behavior
How much Bonus Payable
A minimum of 8.33% of wages actually earned during the accounting year, subject to a minimum of 100 rs,
is payable to each eligible employee irrespective of profit or loss. The minimum amount payable is limited to
20% of the wages.
What components of wages shall be considered for calculation of Bonus:
Wages / Salary are understood to be basic pay and VDA & excludes any other allowance.
When the salary or wage of an employee exceeds Rs.3500/-per month, the Bonus payable for such employees shall be
calculated as if his salary or wage were only Rs.3500/- pm (but eligibility for paying bonus is Rs.10,000/-)
When is Bonus Payable
The Bonus is payable within a period of 8 months from the close of the accounting year. Where there is a dispute
regarding payment of bonus, it becomes payable within a month from the date that the award becomes enforceable
or the settlement comes into operation.
METHODS OF COMPUTATION--FIRST STEP ----NET PROFIT
Presumption of Accuracy: (Section 23)-----Accuracy of the balance sheet and profit and loss statement of the
establishment is presumed under the Act if they are duly audited by qualified auditors. If however the Arbitrator
or Tribunal hearing a dispute is not satisfied with the accuracy or if any trade union or employees being parties to the
dispute demand clarification of accuracy, the employer shall comply with the demand.
If the authority requires auditing of accounts of an employer, not being a company, such as that of a proprietary concern
or a partnership firm, such employer shall comply with the requirement within such time as directed, at his own
expenses.
METHODS OF COMPUTATION--STEP TWO ----GROSS PROFIT
The gross profits derived by an employer from an establishment in respect of any accounting year shall---
(a) in the case of a banking company be calculated in the manner specified in the first schedule;
(b) in any other case, be calculated in the manner specified in the Second Schedule.
From India, Mysore
Objective of the Act : Until the Payment of Bonus Act was promulgated, bonus was linked to profits
meaning that if an establishment did not make profits in a certain year, the employer was not liable to pay bonus.
But the present Act however makes the employer liable to pay bonus to an employee as an annual statutory payments
irrespective of the existence of profits.
Applicability of the Act
The Act includes all employees, factory workers or clerical staff or executives, drawing wages or salary up to
Ten Thousand rupees per month, who perform any skilled, unskilled, manual, supervisory, managerial, administrative,
technical or clerical work.
Eligibility
To become eligible for bonus every employee must have worked in the establishment for not less than 30 working days
in the relevant accounting year.
Bonus is not payable
On subsistence allowance paid to an employee during the period of his suspension, since such employee did not
actually perform any work. Bonus can be forfeited if dismissal is for riotous behavior
How much Bonus Payable
A minimum of 8.33% of wages actually earned during the accounting year, subject to a minimum of 100 rs,
is payable to each eligible employee irrespective of profit or loss. The minimum amount payable is limited to
20% of the wages.
What components of wages shall be considered for calculation of Bonus:
Wages / Salary are understood to be basic pay and VDA & excludes any other allowance.
When the salary or wage of an employee exceeds Rs.3500/-per month, the Bonus payable for such employees shall be
calculated as if his salary or wage were only Rs.3500/- pm (but eligibility for paying bonus is Rs.10,000/-)
When is Bonus Payable
The Bonus is payable within a period of 8 months from the close of the accounting year. Where there is a dispute
regarding payment of bonus, it becomes payable within a month from the date that the award becomes enforceable
or the settlement comes into operation.
METHODS OF COMPUTATION--FIRST STEP ----NET PROFIT
Presumption of Accuracy: (Section 23)-----Accuracy of the balance sheet and profit and loss statement of the
establishment is presumed under the Act if they are duly audited by qualified auditors. If however the Arbitrator
or Tribunal hearing a dispute is not satisfied with the accuracy or if any trade union or employees being parties to the
dispute demand clarification of accuracy, the employer shall comply with the demand.
If the authority requires auditing of accounts of an employer, not being a company, such as that of a proprietary concern
or a partnership firm, such employer shall comply with the requirement within such time as directed, at his own
expenses.
METHODS OF COMPUTATION--STEP TWO ----GROSS PROFIT
The gross profits derived by an employer from an establishment in respect of any accounting year shall---
(a) in the case of a banking company be calculated in the manner specified in the first schedule;
(b) in any other case, be calculated in the manner specified in the Second Schedule.
From India, Mysore
Dear Seniors,
As per the act section 2 (21) Salary or wage means all remuneration (Other than Over time work) capable being expressed in terms of money which would, if the terms of employment, express or implied, were fulfilled, be payable to an employee in respect of his employment or of work done in such employment including DA but done not include (i) any other allowance which the employee is for the time being entitled to;
please let me know what are the allowance not included in wage or salary, as it is not clear what are the allowance to exclude.
for example, if an employee is drawing a salary of Rs.18000/- and the breakup is as follows:
Basic + DA : 10000/-
HRA : 5000/-
Conveyance: 800/-
LTA : 833/-
Medical: 833/-
Spl Allowanace:534/-
for bonus eligibility we have to consider only basic + DA or total gross salary.
Please clarify me.
Thanking you,
Siva Sankar
From India, Calcutta
As per the act section 2 (21) Salary or wage means all remuneration (Other than Over time work) capable being expressed in terms of money which would, if the terms of employment, express or implied, were fulfilled, be payable to an employee in respect of his employment or of work done in such employment including DA but done not include (i) any other allowance which the employee is for the time being entitled to;
please let me know what are the allowance not included in wage or salary, as it is not clear what are the allowance to exclude.
for example, if an employee is drawing a salary of Rs.18000/- and the breakup is as follows:
Basic + DA : 10000/-
HRA : 5000/-
Conveyance: 800/-
LTA : 833/-
Medical: 833/-
Spl Allowanace:534/-
for bonus eligibility we have to consider only basic + DA or total gross salary.
Please clarify me.
Thanking you,
Siva Sankar
From India, Calcutta
Lok Sabha passes Bonus Bill; benefits to accrue from April 2014
The Lok Sabha on Tuesday passed a bill allowing doubling of wage ceiling for calculating bonus to Rs 7,000 per month for factory workers with establishments with 20 or more workers, with the benefits being applicable retrospectively from April 2014.
The Payment of Bonus (Amendment) Bill, 2015, was passed by a voice vote, with some members objecting to the raising of eligibility limit for payment of bonus from a salary of Rs 10,000 per month to Rs 21,000.
Replying to a debate on the legislation, Labour Minister Bandaru Dattatreya said the Government has ensured that the interest of workers are protected and there is no infringement on their rights.
"Because of Bihar Elections this bill got delayed... The Prime Minister spoke to me and asked why should the benefits of this Act should accrue to workers from 2015. It should be made available from the April 2014," he said while moving an official amendment to the Bill.
The official amendment provides that the benefits of the Act would be deemed to have come into force on April 1, 2014, instead of April 1, 2015. Dattatreya said the Ministry has held 21 tripartite meetings with all central trade unions while arriving at a decision.
The Bill provides for enhancing monthly bonus calculation ceiling to Rs 7,000 per month from the existing Rs 3,500. It also seeks to enhance the eligibility limit for payment of bonus from Rs 10,000 per month to Rs 21,000 per month.
"The Government's paramount intention is to safeguard the interest of workers... There is no infringement of workers' rights and whatever the government does will be in the interest of workers," Dattatreya said.
After the bill was passed, Deputy Speaker M Thambidurai, who was in the Chair, said the government should be congratulated for bringing the measure as also for effecting the benefits retrospectively.
Terming the legislation as historic, Dattatreya said the outgo from government coffers would be about Rs 6,203 crore.
The Minister said the Bill would benefit crores of organised sector worker. He said unorganised sector constitute 93 per cent of the workforce or about 40 crore people.
Participating in the discussion, Mumtaz Sanghamita (TMC) said "it will benefit vast majority of poor workers. Bonus is the thing which is extra and over regular pay". She, however, wanted to know whether the increase in ceiling was commensurate to the inflation rate.
M Srinivas Rao (TDP) observed that labour laws in India were very weak and government should ensure safety and security for workers.
K Visheweshwar Reddy (TRS) said the sharp cut off of Rs 21,000 per month was flawed and added that contractual workers in factories are overworked and underpaid.
Sankar Prasad Datta (CPI-M) too echoed similar views saying that Rs 21,000 per month ceiling should not be there. Jaiprakash Narayan Yadav (SP) said there should be a special provision for women workers while providing bonus.
Prahlad Singh Patel (BJP) asked the government to fix a minimum ceiling and not the maximum one. "We can also think of linking it with the Pay Commission, so that we do not have to come again and again to Parliament to make changes". He said bonus should not be linked to profit or losses.
The Payment of Bonus Act, 1965, is applicable to every factory and other establishment in which 20 or more persons are employed on any day during an accounting year. The last amendment to the eligibility limit and the calculation ceiling was carried out in 2007 and made effective from April 1, 2006.
This amendment in the Act to increase wage ceiling and bonus calculation ceiling was one of the assurances given by the Centre after 10 day central trade unions went on one-day strike on September 2.
From India, Kolkata
The Lok Sabha on Tuesday passed a bill allowing doubling of wage ceiling for calculating bonus to Rs 7,000 per month for factory workers with establishments with 20 or more workers, with the benefits being applicable retrospectively from April 2014.
The Payment of Bonus (Amendment) Bill, 2015, was passed by a voice vote, with some members objecting to the raising of eligibility limit for payment of bonus from a salary of Rs 10,000 per month to Rs 21,000.
Replying to a debate on the legislation, Labour Minister Bandaru Dattatreya said the Government has ensured that the interest of workers are protected and there is no infringement on their rights.
"Because of Bihar Elections this bill got delayed... The Prime Minister spoke to me and asked why should the benefits of this Act should accrue to workers from 2015. It should be made available from the April 2014," he said while moving an official amendment to the Bill.
The official amendment provides that the benefits of the Act would be deemed to have come into force on April 1, 2014, instead of April 1, 2015. Dattatreya said the Ministry has held 21 tripartite meetings with all central trade unions while arriving at a decision.
The Bill provides for enhancing monthly bonus calculation ceiling to Rs 7,000 per month from the existing Rs 3,500. It also seeks to enhance the eligibility limit for payment of bonus from Rs 10,000 per month to Rs 21,000 per month.
"The Government's paramount intention is to safeguard the interest of workers... There is no infringement of workers' rights and whatever the government does will be in the interest of workers," Dattatreya said.
After the bill was passed, Deputy Speaker M Thambidurai, who was in the Chair, said the government should be congratulated for bringing the measure as also for effecting the benefits retrospectively.
Terming the legislation as historic, Dattatreya said the outgo from government coffers would be about Rs 6,203 crore.
The Minister said the Bill would benefit crores of organised sector worker. He said unorganised sector constitute 93 per cent of the workforce or about 40 crore people.
Participating in the discussion, Mumtaz Sanghamita (TMC) said "it will benefit vast majority of poor workers. Bonus is the thing which is extra and over regular pay". She, however, wanted to know whether the increase in ceiling was commensurate to the inflation rate.
M Srinivas Rao (TDP) observed that labour laws in India were very weak and government should ensure safety and security for workers.
K Visheweshwar Reddy (TRS) said the sharp cut off of Rs 21,000 per month was flawed and added that contractual workers in factories are overworked and underpaid.
Sankar Prasad Datta (CPI-M) too echoed similar views saying that Rs 21,000 per month ceiling should not be there. Jaiprakash Narayan Yadav (SP) said there should be a special provision for women workers while providing bonus.
Prahlad Singh Patel (BJP) asked the government to fix a minimum ceiling and not the maximum one. "We can also think of linking it with the Pay Commission, so that we do not have to come again and again to Parliament to make changes". He said bonus should not be linked to profit or losses.
The Payment of Bonus Act, 1965, is applicable to every factory and other establishment in which 20 or more persons are employed on any day during an accounting year. The last amendment to the eligibility limit and the calculation ceiling was carried out in 2007 and made effective from April 1, 2006.
This amendment in the Act to increase wage ceiling and bonus calculation ceiling was one of the assurances given by the Centre after 10 day central trade unions went on one-day strike on September 2.
From India, Kolkata
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Bonus act amendment gazette copy.pdf
THE PAYMENT OF BONUS ACT.doc