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Dear Sir,
When the employee get annual income more than 42000/- then the bonus will be 3500/-
but when the employee get annual income 40000/- then bonus will be =
40000*8.33%= 3332/-
its right or wrong?
please advice us because we calculated the bonus from last 3 years in this manner.

From India, Mumbai
The Employee get the monthly salary =4500+4500+4500+4500+4000+4500+5000+4000+4500=40000/- after this he leave the job. So the bonus calculate on total salary or monthly salary? please advice us
From India, Mumbai
To keep it simple ,it is better to understand the problem in the context of the provisions of the Act. If an employee' s Basic + DA exceeds Rs.3500/- p.m, you should take only Rs.3500/-p.m for claculating bonus. If his basic+ DA is less tan Rs.3500/-p.m , you should take the actual wages drawn by the employee in that case. However, please note that the slary of an employee does not exceed Rs.10000/-p.m to be eligible for bonus.
HR & Labour Law Advsior

From India, Mumbai
Dear Akhilesh,
As per Section 12 of the Payment of Bonus Act,1965 all the employees drawing salary or wages upto Rs.10000/- per month or less are eligible for the payment of bonus but where the salary or wages of an employee exceeds Rs.3500 per month, the bonus payable to such employee shall be calculated as if his salary or wages were Rs.3500 per month.
In my opinion,your calculation seems to be in order.
BS Kalsi
Member since Aug 2011

From India, Mumbai
Hi Akhilesh,

I would like to tell you the method of Bonus Calculations. The bonus is calculated on Basic+DA. We have Payable Basic and Paid Basic every month. Paid Basic can be changed subject to attendance of an employee every month. As per act Minimum Bonus-able Salary or Wage is Rs. 3500/- per month.

Example :- A is having payable basic For Rs. 4000/- and B is having Payable Basic for Rs. 3500/- and C is having Payable Basic for Rs. 3000/- per month and during the financial year (April to March).

If A,B & C are full present and got full paid Basic in organisation during the financial year. The Bonus-able wage for A : Rs. 42000/-, B : Rs. 42000/- and for C : 36000/-. Accordingly you can calculate 8.33% or what ever bonus percentage is decided by the management on Bonus-able Wage.

If A,B & C are 15 days absent. You have to consider the month-wise absent details for calculating their Bonus-able wage. The formula for calculating Monthly Bonus-able wage is if the payable bonus is exceeding Rs. 3500/- :- Rs. 3500/- (i.e. Min Bonus-able wage set by Act) / (Divided by) Number of days for the particular month (ie. 30,31,28) * (Multiply by) Number of days present during the month = (Equal to) you will get the Bonus-able wage for that month.

By using this formula you can calculate the month-wise Bonus-able wage for the year of an employee. You can calculate the Bonus on Bonus-able wage.

I hope this will suffice your query.

One more thing : As per section 12 of Payment of Bonus Act,1965, The bonus is eligible for employees those Basic+DA is not exceeding Rs. 10,000/- (Sorry but Not on Salary or Wage is exceeding Rs. 10000/-). In most of the organisations, the management is also paying bonus to such employees till he is in employment and not paying to resigned employees.

Sorry I am just sharing my view and knowledge. Mr. Kalsi, please correct me if any thing wrong in above.


Madhav Kalele


From India, Mumbai
Dear Akhilesh,

I support the inputs of Mr. B. Sai kumar and corrected excell statement is attached herewith for your ready reference and doing needful. Forget about the previous payment and release the correct payments this year.

For all purposes, if you are computing for Workmen it must be calculated on 26 days and when you compute the salaries of mgt staff it must be on the total days of a month. If there is no Loss of pay during the total 12 months, there will be no difference and the total must be Rs.3500/- pa irrespective of their category (workmen / mgt. staff). All these to be recorded in Bonus register from time to time. Must be made available for inspection whenever labour officer or any official visits the firm.

Please look at the statement attached herewith and you will find the difference between absenting workmen / staff and properly attending staff/ workmen. However the eligibility of bonus / limit of basic would be 10,000/- maximum per month and maximum payable is Rs.3500/- pa 8.33% as per Act. Those who draw more than 10,001/- they are not eligible for payment of Bonus as per Act.

Dear Seniors, please correct me if i am wrong.

In case you need further clarifications, please free to call on my mobile.

Regards===SRao= 9849562900

From India, Hyderabad

Attached Files
File Type: xls Bonus Calculation corrected.xls (27.0 KB, 5865 views)

Dear Mr.S. Rao,
Sorry I am not Agree with your comment i.e. on divide by 26. The calculation of Bonus is not as per the Gratuity as well as Leave Encashment. It is totally different.
Madhav Kalele

From India, Mumbai
Dear Friends,
Don't make it so complicated.
Let me share my views:-
1. Every organisation is practicing on some percentage of Bonus but not more than 8.33% of the Basic+DA
2. Employers are paying bonus to every employees irrespective of the salary range and also mentioned this part / percentage in CTC calculations.
3. Calculate bonus accrual on monthly basis for payment in year end (or Deepawali) if you don't want to confuse yourself at the time of payment.
4. Calculation will be : If "A" work for 30 days in January and his Basic + DA is Rs. 3500 then formula will be Rs. 3500 (divided by) 8.33% (divided by) 31 days and (Multiply by) 30 days of actual working.
5. Add the bonus amount and pay.
Simple and Clear!!
Chill HR !!

From India, Gurgaon
I hope you realise that 8.33% is the minimum bonus that is required to be paid.
You have to pay bonus as per the act up to a maximum of 20% of annual wages (subject to the ceiling of 3500 per month).

From India, Mumbai
Hi Pawan
Assuming that you are talking of statutory bonus under Payment of Bonus Act (and not exgratia bonus that is at the discretion of the company), you are eligible for bonus between Rs. 3500 * 12 * 8.33% (min bonus) and Rs. 3500 * 12 * 20% (max bonus), depending on how much profit your company has made and few other criteria specified in the act.

From India, Mumbai
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