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Hi All Greetings Please guide me to prepare bonus for our employees. I would like to know full details and procedures about payment of bonus act. Regards Kanaka-Chennai
From India, Madras
Dear Kanaka

Bonus to be paid under Payment of Bonus Act,1965 is to be calculated as under :

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.

5. Payment is to be made on Register prescribed under the act.

6. Return of payment of bonus is to be submitted with ALC or other designated authority under the act , within 30 days of payment of bonus to employees.


Anil Anand
From India, New Delhi
Dear Ms Kanaka
In addition to above information you shauld keep in mind that we should calculate bonus on number of working days of employees in that period, ie, we should not take into cosideration leaves holidays & absentes for the purpose of calculating Bonus.
Bonus is payed only for the number of worked days from april to march of every eyer completed year which will become due after 9 months from the date of eligibility for payment.
From India, Bangalore
Dear Mr. Manu
I need your help.
We have one employee who worked from April to March and his basic was Rs. 2700. In the month of october there was LWP for 2 days and besides 8 holidays (incl sundays & festival holidays) and actual total days was 29 and as per bonus act his working days 21. Can you please help in that case how do i calculate bonus.
From India, Gurgaon
Dear Group,
I have an query , I am working with a company where nobodys basic below 5000/- then in that case no bonus as per act .
Do u suggest me then how we can give Bonus.........
Waiting eagerly 4 ur reply.
Warm Regards,
From India, Mumbai
Under the act as 'BONUS ' no amount can be paid to an employee you have categorised..Any payment made is taxable .Some amounts are booked under ex gratia,special annual pay[taxable] or gifts[FBT applicable] and paid.ESOPs and rewards are others.
Today when CTC is calculated, due to the act limitation this component is included here and total pay announced.
From United States
Hi All, Another query - Our Company has very high Basic almost 60% of the Gross. Do we need to give the yearly bonus. please enlighten. Regds Radha

Dear Kanaga :
In addition to Mr Manu's comments, I wd like to indicate that the bonus is paid on the wages earned.
When there is a LWOP or absence, where is the question of salary paid.
If no salary is paid, bonus is not payable.
Hope this is clear.
From India, Hyderabad
Dear Kanaga :
In addition to Mr Manu's comments, I wd like to indicate that the bonus is paid on the wages earned.
When there is a LWOP or absence, where is the question of salary paid.
For no salary paid, no bonus is payable.
Hope this is clear.
:: Dhinakaran
From India, Hyderabad
Dear anil, Could u please tell me how to calculate single and double linked DA with an example? Also what is the difference between employee,worker and workman?
From India, Mumbai
Dear Mr. Anand & Kanaka,
Would like to know if a basic for an employee is say Rs.3000/- and for a particular month on the basis of LWOP he/she has been paid Rs.2800/- will the bonus be calculated on Rs.2500/- or bonus will be worked on Rs.2333/- (taking pro rata of Rs.2500/-).
Please in need of a urgent answer.
Rajeev Sharma
From India, New Delhi
from where an employer will give letter regarding the bonus distributed for the current year ... ashish
From India
is Bonus payable by a loss making company in its 6th year of operation. Also will it be payable to contract labour. The above is for a service industry
From India, Gurgaon
Dear Sir, Can you explain the ammended bonus Act ? I think the minimum for the payment of bonus is amended to Rs.10000 ? Pls give me the correct calculation
From India, Kottayam
what is the applicability for the bonus? basic should be less than 5000/- or less than 10000/-

Dear Radha u can limit the amount to 3500/- for Bonus, and rest amount u may calculate as exgratia
From India, Bangalore
Dear Samer,
ALC means Assistant Labour Commissioner. A return in form 'D' is to be sent to the Inspector of the area.
Skylark Associates, Gurgaon (Haryana)
Labour Law Consultants (m)

From India, Delhi
From India, Bangalore
Dear Mr.Khola,
Thank you very much,
Kindly update, what is % of salary breakup(Like basic,Dearness,HRA,Convency,Medical,LTA and ect.)and also how&which % we calculate dearness allowance from the basic.
and also my name spelling is Sameer not samer
From India, Daman
Dear Sameer,
I do not came across any of the labour law which gives us guidelines or directions as regards to % of salary break up & therefore in my opinion you are to decide of your own these % under different heads of the salary. Sorry for your name spell.
With regards,
R N Khola

From India, Delhi
Dear Friends,
The calculation of Bonus under payment of Bonus Act given by Anil anand is not correct.
The act has been amended much earlier.
Now the employee coverable wage limit is Rs. 10,000 and not Rs.3500/ per month which means employees drawing salary up to Rs. 10,000 will be eligible for bonus.
The calculation will be done as if employee is drawing salary of Rs. 3500/ and not Rs.2500. as mentioned in posting.
anil kaushik
From India, Delhi
Dear Anil,
Mr. Anil Anand had made his posting regarding this subject on dated 04.10.2005 while the amendment ordinance was made on 27.10.2007 which was made effective from 01.04.2006 & therefore in my opinion his information was correct on the day posting. Your brief is applicable w.e.f. 01.04.2006 & this is still in force.
Submitted only for information.

With Regards,
Skylark Associates, Gurgaon (Haryana)
(Labour Law Consultants)

From India, Delhi
Hey guys,
Can anyone guide me as to how Bonus is calculated for employees :-
1. Does the calculation has to be based on financial year (April - Mar)?
2. How do u calculate bonus for the employees who have recently joined the Company?
3. For the employees who have completed one month should one month of the Basic salary be paid?
4. What is the formula for calculation of Bonus?
Please help me guys, coz I want to change the current system that exists in my company.
Thanks & regards,
From India, Pune
Dear Seniors,
in case if an employee receives Rs.7500 in case of max. amount of bonus (20% bonus),
then what would be the effect of Rs.4000 ?(i.e.7500-3500 min. bonus at 8.33%)
will this regarded as Ex - gratia? or simply 7500?- is called bonus?
From India, Ankleshwar
Kindly note that last year we received maximum amount for bonus is Rs 10,000
This year we get maximum amount for bonus is Rs. 3,500 only.
Our company gives statement as:
This is to inform you all that the Bonus Amount for the year 2011-12 has been credited to all the eligible working employees in their bank account.
The eligibility criteria is as defined below
1) Minimum Worked days from April 11-March 12 should be 30
2) Basic Salary should be less than Rs.10000/-
3) Credit of 8.33% of annual earned basic subject to the ceiling amount of Rs.3500/-
4) Those employees for whom 8.33% of annual earned basic is less than Rs.3500/- would be paid actuals
Please advice whether this is against the bonus act or as per bonus act.
Also what is the maximum bonus amount as per bonus act?
Please clarify in brief
From India, Chennai
Hi Anil,
Please Guide Me, I have to prepare a performance bonus policy for Support staff(Admin, MIS Executive, HR)
I am working in a consulting firm.
Kindly let me know how to calculate and % age as well.
From India, Delhi

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