Bonus Calculation [Thread 542545] - CiteHR
Assistant Engineer, Indian Telephone Industries,
Rajesh Kumar Dubey
Manager - Hr

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Dear All,
I am working as Sr. HR Executive in a Manufacturing Company. We used to pay the Bonus in monthly salary till March.2015. We added the same in Annual Gross salary WEF april 2015. Now how should we calculate the Bonus for employees. shall we calculate as Rs.700/- per month & pay to the employee or shall we pay the same next year in Diwali. Kindly guide & attach if supported documents any.
Firoj Attar

Dear Firoj Attar,

As per Section 19 of the Payment of Bonus Act, bonus has to be paid within 8 months from the completion of the accounting year. Kindly go through the section as under.

"19. Time-limit for payment of bonus. — 1[All amounts] payable to an employee

by way of bonus under this Act shall be paid in cash by his employer —

1 Subs, by Acl 23 of 1976, sec. 13, for “(1) Subject to the provisions of this section all amount”

(w.r.e.f. 25-9-1975).

Case Law

12(2) The Payment of Bonus Rules, 1975

(a) where there is a dispute regarding payment of bonus pending before any

authority under section 22, within a month from the date on which the

award becomes enforceable or the settlement comes into operation, in

respect of such dispute;

(b) in any other case, within a period of eight months from the close of the

accounting year:

Provided that the appropriate Government or such authority as the

appropriate Government may specify in this behalf may, upon an application

made to it by the employer and for sufficient reasons, by order, extend the

said period of eight months to such further period or periods as it thinks fit;

so, however, that the total period so extended shall not in any case exceed

two years-"


Dear Firoj
Since you already paid the Bonus for accounting year 2014-2015. At present Bonus was due to be paid for FY 2014-15.
Now You have to pay Bonus for FY 2015-2016 , which will be due in the month of Nov 2016. So No need to worry at present.
Calculation still at present @ 3500/- PM Basis either Min - 8.33 % , Or Max 20 % at the discretion of management or which you have taken in CTC at time April -2015.
Hope You will be satisfied for

Thanks a lot Raj sir & Abbas Sir. It is now clear to me. One more question I have, what is the definition of Bonus as per legal terms as it is not mentioned in the Bonus act. Thanks, Firoj Attar
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