Madhu.T.K
Industrial Relations And Labour Laws
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Rakesh_bhagat26@rediffmail.com
Sr. Executive (hr & Admin) (m/s Stalwart
Anshita_arora
Human Resource
Nabarunb
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Thread Started by #nabarunb

Dear Members,
Can you please clarify the following -
Case 1 - If Employees basic Rs.4000 and Gross Rs. 7000. Bonus will be calculated on Rs. 4000 or Rs. 7000 ?
Case 2 - If employees basic Rs.5600 and Gross Rs.11000. Bonus will be calculated on Rs. 5600 or 7000 ?
Case 3 - If employee basic Rs. 6995 and Gross Rs. 13600 . Bonus will be calculated on Rs. 6995 or Rs 7000 ?
Case 4 - If employee basic Rs. 11800 and Gross Rs. 21000 . Whether this employee come under purview of bonus act ?
Case 5 - If employee basic Rs. 12000 and Gross Rs. 21200. whether this employee come under purview of bonus act ?
Case 6 - If employee basic Rs. 21000 and Gross Rs. 32000. whether this employee come under bonus act or not . if yes what amount bonus will be calculated ?
Regards
Nabarun Basu
13th February 2016 From India, Siliguri
Hi,
Greetings of the day!!!
As per recent amendment We have to calculate Bonus on "seven thousand rupees or the minimum wage for the scheduled employment, as fixed by the appropriate Government, whichever is higher".
1. Eligibility limit for payment of bonus increased from Rs.10,000 to Rs.21,000
2. Calculation ceiling increased from Rs.3,500 p.m. to Rs.7,000 p.m.
The amendments have been made effective retrospectively from 1st April 2014. Hence we will have to work out differential liability for 2014-15 and make payment accordingly.
Regards,
Ashish
13th February 2016 From India, Pune
Dear Ashish Sir, Kindly tell me ...is ESIC deducted from bonus?
13th February 2016 From India, Bengaluru
Dear Nabarun Basu,
For your kind reference here i am attaching the amended sheet for Bonus Calculation. Find the same and read it carefully and after that if you need any clarification you make me call at given below no. +91 987 176 3456.
By the way Mr. Ashish is very clearly mentioned here, so i don't think you need more clarification.
13th February 2016 From India, Delhi

Attached Files
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File Type: pdf Payment of Bonus (Amdmt) Bill 2015 as passed.pdf (56.0 KB, 1885 views)

Bonus is to be computed on basic and DA and has nothing to do with gross
Further, if basic and DA is more than 7000 or minimum wages, whichever higher, then the bonus will be paid on that ceiling amount and not on basic and da.
14th February 2016 From India, Mumbai
DEAR MR. NABARUNR FOR YOUR CASES FROM 1 TO 3 ANSWER IS 7000/- AND EMPLOYEES FROM CASE 4 TO 6 ARE ELIGIBLE FOR BOUNUS. REGARDS PARDEEP SHARMA
15th February 2016 From India, Mumbai
Dear sir, kindly clarify the difference or comparison between rs 7000/- celing of BASIC DA and MINIMUM WAGES CEILING.... NANDHAGOPALAN.R
16th February 2016 From India, Chennai
Hi Nandagopal
The new act says that for the purpose of computing bonus, you need to take 8.33% of annual salary (or 20% of annual salary)
The salary will the lower of actual salary or ₹7000 per month.
However, if the minimum wages is more than ₹7000 per month, then you take the ceiling of minimum wages instead of ₹7000
Hope it is clear
17th February 2016 From India, Mumbai
Dear Basu
For 1 to 3 point, bonus will be calculated on actual basic salary.
For 4 to 6 point, bonus will be calculated on Rs. 7000 or the minimum wages as fixed by government for that category of employement, whichever is higher. if minimum wages is 7600 then the bonus will be calculated on Rs. 7600 not on 7000.
Regards
Dinesh Kumar
17th February 2016 From India, New Delhi
Dear Nabarun,
Reply to your queries are:-
Case- 1 Bonus will be calculated on 4000 or the minimum wages if it is scheduled employment which ever is higher.
Case - 2 Bonus will be calculated on 5600 or the minimum wages if it is scheduled employment which ever is higher.
Case - 3 Bonus will be calculated on 6995 or the minimum wages if it is scheduled employment which ever is higher.
Case - 4 Bonus will be calculated on 7000 or the minimum wages if it is scheduled employment which ever is higher. Emp is covered under Bonus Act.
Case - 5 Bonus will be calculated on 7000 or the minimum wages if it is scheduled employment which ever is higher. Emp is covered under Bonus Act.
Case - 6 Bonus will be calculated on 7000 or the minimum wages if it is scheduled employment which ever is higher. Emp is covered under Bonus Act.
Trust the above will satisfy your query.
S K Bandyopadhyay
USD HR Solutions

+919831081531
17th February 2016 From India, New Delhi
NAV' A mutual fund’s price per share or exchange-traded fund’s (ETF) per-
17th February 2016 From India, Delhi
Case 1 - If Employees basic Rs.4000 and Gross Rs. 7000. Bonus will be calculated on Rs. 4000 or Rs. 7000 ?

Bonus will be calculated on Rs 4000

Case 2 - If employees basic Rs.5600 and Gross Rs.11000. Bonus will be calculated on Rs. 5600 or 7000 ?

Bonus will be calculated on Rs 5600

Case 3 - If employee basic Rs. 6995 and Gross Rs. 13600 . Bonus will be calculated on Rs. 6995 or Rs 7000 ?

Bonus will be calculated on Rs 6995

Case 4 - If employee basic Rs. 11800 and Gross Rs. 21000 . Whether this employee come under purview of bonus act ?

He will come under the Payment of Bonus Act. (because for calculation of bonus if we have taken only Basic salary, the same basic salary alone would qualify for deciding the eligibility of an employee to get bonus)

Case 5 - If employee basic Rs. 12000 and Gross Rs. 21200. whether this employee come under purview of bonus act ?

Same as above Case 4

Case 6 - If employee basic Rs. 21000 and Gross Rs. 32000. whether this employee come under bonus act or not . if yes what amount bonus will be calculated ?

He will come under the cover of Bonus Act because his basic salary is not more than Rs 21000. As per Payment of Bonus Act an employee means any person employed on wages not exceeding Rs 21000. Therefore, if his basic salalry is 21001, then he will be out of the Bonus coverage.

In the case of an employee whose salary is more than 7000, say Rs 12000, his bonus will be calculated as if his salary is only Rs 7000. At the same time, if he is employed in an industry for which minimum wages has been notified by the government, then that statutory wage will be considered for deciding the bonus qualifying salary. Accordingly, if the notified minimum wages is more than 7000, then that will be taken as bonus qualifying salary. Following the same example, if the minimum wages is Rs 9000, then that wages will be the base for bonus calculation. Obviously, if the minimum wages is less than 7000, say, 6800, but the actual basic wages is 12000, then the bonus will be calculated considering that his wages is Rs 7000 only.

Madhu.T.K
26th February 2016 From India, Kannur
hi all
i have a query in this whole concept on the calculation of wages as the definition of wages as defined under the Bonus Act says " salary or wage” means all remuneration (other than remuneration in
respect of over-time work) capable of 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 and includes dearness allowance (that is
to say, all cash payments, by whatever name called, paid to an employee
on account of a rise in the cost of living), but does not include—
(i) any other allowance which the employee is for the time being entitled
to;
(ii) the value of any house accommodation or of supply of light, water,
medical attendance or other amenity or of any service or of any
concessional supply of foodgrains or other articles;
(iii) any travelling concession;
(iv) any bonus (including incentive, production and attendance bonus);
(v) any contribution paid or payable by the employer to any pension fund
or provident fund or for the benefit of the employee under any law for
the time being in force;
(vi) any retrenchment compensation or any gratuity or other retirement
benefit payable to the employee or any ex gratia payment made to
him;
(vii) any commission payable to the employee.

As per this in a private company there are heads which complete a gross salary like basic, hra, conveyance allowance , education allowance , hostel allowance and special allowance. please clarify how do we need to calculate then ,
15th September 2016 From India, Delhi
Wages/ salary means basic salary and dearness allowance. HRA is also a part of salary if the same is paid as per agreement or settlement. In private establishments, there has been a practice of fixing a lump sum amount as salary and then divide it into small particles under different heads, like Basic, HRA, Conveyance, etc etc. In such situation the sum total is the amount of remuneration agreed and that will qualify for bonus.
In a structured pay scale, there will be a basic pay scale and all other allowances will be fixed or even variable according to grades. In such situation, the allowances other than dearness allowance will qualify for bonus. This is the treatment with regard to lay off compensation, gratuity, retrenchment compensation or wherever reference as to wages are made.
Madhu.T.K
17th September 2016 From India, Kannur
Thanks Madhu for the response , this means that we will calculate the Bonus on the gross as we declare all the components of the salary in the appointment letter. Only have to leave the PF .Also please clarify if the HRA is also to be included as in all other compliances like PF it is not included.
19th September 2016 From India, Delhi
If HRA is a part of salary then it should also be considered. As already pointed out, under normal circumstances only Basic salary and DA will qualify for Bonus. If these are considered for calculation of bonus, then only these two components should be considered for deciding whether an employee is eligible for bonus or not. Therefore, if you pay bonus only on Basic (+ DA, if any) then an employee whose basic (+DA) salary is not more than 21000 will be entitled to bonus even though his gross salary is more than 21000. At the same time, if you give bonus on a salary which includes basic, HRA etc then for deciding eligibility also you can include all these components.
Madhu.T.K
20th September 2016 From India, Kannur
Dear All
Kindly find the below Bonus Amendment it has mentioned that 7000 or mini wages whichever is higher not less
1. (1) This Act may be called the Payment of Bonus (Amendment) Act, 2015.
(2) It shall be deemed to have come into force on the 1st day of April, 2014.
2. In section 2 of the Payment of Bonus Act, 1965 (hereinafter referred to as the
principal Act), in clause (13), for the words ten thousand rupees, the words twenty-one
thousand rupees shall be substituted.
(i) for the words three thousand and five hundred rupees at both the places
where they occur, the words seven thousand rupees or the minimum wage for the
scheduled employment, as fixed by the appropriate Government, whichever is higher
shall respectively be substituted;
5th October 2016 From India, Mumbai
Dear All
Kindly let us know the below Bonus Working is correct or incorrect:
Sr. No. Case Bonus Calculation Amt
1 If Gross Salary is Less than 7000 or 10000 (Mini Wages) 7000
2 If Gross Salary is More than 7000 & Less than 10000 (Min Wages) Mini Wages
3 If Gross Salary is More than 10000 (Mini Wages) Mini Wages
Thanks & Regards
5th October 2016 From India, Mumbai
#Anonymous
1. If minimum wages (basic+da) is rs.333/- per day and present is full month 26 days then wages will come =8658/- so bonus will be calculate on 8658/
2. If absenteeism in certain month, 24 working days then wages will come rs.7992/- .
On that time bonus will calculate on rs. 7992/- or rs. 7000/-.
3.if absenteeism in certain month, 12 working days then wages will come rs.3996/- .
On that time bonus will calculate on rs. 3996/- or rs. 7000/-.
Please clarify.
Regards
rkn
14th October 2016 From India, Kolkata
Bonus is to be calculated on the wages earned. Therefore, if anybody has been on leave without pay and therefore, earned less than what is the normal wages per month, he should get less bonus only. Very simple, calculate the bonus according to what you have paid.
Madhu.T.K
17th October 2016 From India, Kannur
if employees basic + DA is 15500 than what will be the calculation ( skilled or clk1)
21st October 2016
Calculate the bonus as if salary is Rs 7000 per month. In case the minimum wages as applicable to him is more than Rs 7000, then take that minimum wages as the basis for calculation of bonus.
I think the answers given above (ie, 20 posts) clarifies everything including the query in post No 21. It is advisable that you should go through the posts and post queries only if the posts do not satisfy you.
Madhu.T.K
22nd October 2016 From India, Kannur
Dear Madhu TK & All
The confusion is about 7000 ceiling limit according to some members it is minimum wages limit and according to some members it is the minimum bonus limit. Actually this kind of different replies given by seniors let the querist to be confused that if basic Plus DA is less then 7000 say 5600 then we need to take actual basic plus DA i.e. 5600 for bonus calculation or should take 7000 for bonus calculation,
Pls clarify this issue of 7000 ceiling limit.
22nd October 2016 From India, Jaipur
Please read my post (link 12) which clarifies your doubts. If the wages is below Rs 7000, take the actual salary and if it is more than 7000, then take 7000. In case the minimum wages is more than 7000, then take that minimum wages for calculation of bonus. The most important thing to be noted with regard to the amended section is that minimum wages will come in to picture only if your bonus qualifying salary is more than Rs 7000. That means, if you are paying less than 7000, say, Rs 6000 and whereas the minimum wages is more than 7000, say, Rs 8000, then you need not calculate and pay bonus on minimum wages but just pay it based on the actual wages paid, ie, 6000. At the same time if your salary is more than 7000, say, 10000, then you have to pay bonus on 7000 or minimum wages whichever is higher, ie, Rs 8000.
Madhu.T.K
22nd October 2016 From India, Kannur
Dear Madhu TK sir.
I have study your post No 12 also in this thread wherein you have mentioned if Basic plus DA is less then 7000 say 6000 then bonus will be calculate on 6000 and if basic plus DA is exceed 7000 say 12000 then bonus will be calculate either or 7000 or on state minimum wages for scheduled employment whichever is higher,
I want to know in which sec of bonus act. It written that if basic plus DA is less then 7000 then actual basic plus DA will be taken for bonus calculation ,
22nd October 2016 From India, Jaipur
Hello sir
Iam employee of a private company of salary 13000/p.m in financial year 2015-16. The company started on 1sep 2015 and i have joined on 1 oct 2015. If i am eligible ro bonus or not??. If am eligible to bonus how to calculate the bonus either it has to taken fully financial year or not??
Calculation of minimum bonus
1. 13000x8.33%x12 or
2. 13000x8.33%x6 or
Maximu bonus
1.13000x20%x12
2.13000x20%x6
The company has fixed the bonus amount to 10000/-
Plese suggest me how much amount i can be received
22nd October 2016 From India, undefined
A company is exempt from paying bonus for the first 5 years unless it has actually made profits.
So if the company has made loss, you don't get any bonus.
If the company made profit, then compute allocable surplus as described in the act, compare that will the salary paid for the year (again explained in the act). Based on that, you need to decide the % of bonus. It should be the % that will absorb the allocable surplus, subject to a maximum 20%
Ofcourse, the company is not required to pay bonus for 12 months if it only worked for 6 months, and you will get only for 5 months if you joined only in October.
23rd October 2016 From India, Mumbai
Dear AMTGUP, Please see section 9 and sec 10, which says that bonus is payable on actual salary And section 12, which says those getting above the ceiling, get based on ceiling rate
23rd October 2016 From India, Mumbai
Hello sir thanks for your information and i have a another doubt the company is already started more than 5 years but they have opened a newly branch which i have worked and for that financial year the branch have gained profits
24th October 2016 From India, undefined
Branch will be taken as part of the unit unless you have separate balance sheet etc. Moreover, bonus will be payable from the year in which the company makes profit. In such case you will not get infancy protection of five years.
Madhu.T.K
24th October 2016 From India, Kannur
Hello Sir, What Bonus Earnings has to be taken in case of the following case:
Actual Basic+DA of an employee (Sales Reprensentative) = Rs. 7150 (>Rs.7000)
MInimum Wages for that employee cadre = Rs. 8350
Please clarify.
Thanks
R. Venugopal
12th January 2017 From India, Chennai
Pay bonus considering that his salary is Rs 8350 per month. Madhu.T.K
12th January 2017 From India, Kannur
Dear Venugopal,
Since the basic plus DA is exceed the ceiling limit i.e. 7000 also the concern employee is in the coverage of scheduled employment. Hence as per sec 12 of payment of bonus act. 1965 which one is higher weather ceiling limit or state minimum wages. In your case state minimum wages is Higher then ceiling limit therefore State minimum wages i.e. 8350 shall be Taken for Bonus Calculation?
Thanks & Regards
V SHAKYA
HR & LAbour Laws Advisor
13th January 2017 From India, Agra
Dear All,
If Minimum wages including basic+ Da is 8500, in this case as per bonus amendment , bonus is calculated on 7000 or minimum wages which ever is higher means 8500/-
bonus calculation Minimum wages 8500*8.33% = 805 or slab limit 7000*8.33%=583, this is for 8.33 but if company wants to pay bonus on 20% in that case also we have to calculate bonus on slab limit (7000) or minimum wages (8500) which ever is higher?
Regards
Shyam
28th January 2017 From India, Gurgaon
If you strictly follow the Act, then you have to calculate it as 20% of 7000 or 20% of minimum wages whichever is high. Madhu.T.K
30th January 2017 From India, Kannur
Hi Sir,
My last company is denied to give me my statutory bonus they are saying that company is in loss. My basic salary was 15000 and i worked there 1 year 3 months also they are not giving me any increment in my salary. Please help me sir.
15th March 2017 From India, New Delhi
Bonus and increment are two different issues. When you have left the company you cannot demand any increment from them. Increment is purely based on your performance and it is given to motivate the employee to remain with the employer for a long period. Since you have left the employment, you cannot ask for that.
Regarding bonus, you can demand at least the statutory bonus. Send a demand letter to the company.
Madhu.T.K
16th March 2017 From India, Kannur
Is this a query or examination of the members? Please keep your query short.
25th March 2017 From India, Mumbai
Can anyone please clarify, if somebody joins the organization on 16 March 2017, and he is continuing working with the company till date.
How do we treat this employee for calculating his bonus for the FY 2016-17?
Are we liable to pay him the bonus for 16 days for FY 2016-17.
Though he will be eligible for bonus for the FY 2017-18.
Please clarify. Thanks.
8th November 2017 From India, New Delhi
It is very clearly stated that in order to be eligible for bonus one should have worked at least for 30 days in the financial year. Since your employee has not worked for 30 days in 2016-17, he is not entitled to any bonus as per the Act.
Madhu T K
9th November 2017 From India, Kannur
Summary of the above entire posts is below:-
1) First case - look at Actual Pay / Earned Wage Per Month received by the employee is less than Rs.7000 pm, example Rs.6000 pm, calculate bonus on Rs.6000 pm.
2) Second case- if the Actual Pay / Earned Wage per month is received by the employee is more than Rs.7000 pm, example Rs.8500 pm, Look at the Minimum wage of the workmen if its covered under suitable Schedule employment which is example Rs.6000 pm, calculate bonus on Rs. 7000 pm.
3) Third case - if the Actual Pay / Earned Wage per month is received by the employee is more than Rs.7000 pm, example Rs.8500 pm, Look at the Minimum wage of the workmen if its covered under suitable Schedule employment which is example Rs.9000 pm, calculate bonus on Rs. 9000 pm.
4) Fourth case - if the Actual Pay / Earned Wage per month is received by the employee is more than Rs.7000 pm, example Rs.8500 pm, Look at the Minimum wage of the workmen if its covered under Schedule employment which is also as example Rs.8500 pm, calculate bonus on Rs. 8500 pm based on minimum wage.
Hope this makes clear.
1st June 2018 From India, Mumbai
Dear Members,
Can you please clarify the following -
Case 1 :-IF Basic Salary=10800 +DA=7200 Total Salary=18000 Actual Pay Per Month Salary
Bonus will be calculated on Rs.10800 ?
Bonus will be calculated on Rs 18000 ?
Bonus will be calculated on Rs 7000 ?
21st May 2019 From India, undefined
Answer to your query is available in this thread. It has been said that in the case of industries to which Minimum Wages have been notified, the bonus should be calculated on that minimum wages. Otherwise, it can be restricted to Rs 7000. As such if there is any statutory minimum wages applicable to you,calculate bonus on that or calculate it considering that the salary is Rs 7000.
22nd May 2019 From India, Kannur
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