Apex Management
Labour Laws Consultants
Rdsyadav
Educator, Management Consultant & Trainer
PL Kanthan
Proprietor
Koolakash02
Senior Executive - Hr
Somnath Bhattacharya
Business Associates
Pkpatodia
Partner
+6 Others

I have an quarry regarding bonus calculation details are as below mention –
Minimum wage of Rajasthan (5226)
Actual wages paid of our company (5500)
Bonus Ceiling Limit (7000)
Please suggest on which I need to calculate bonus.
Actual wages is > Minimum wages or < 7000
Waiting for your reply….!
5th October 2016 From India, Alwar
Hi Mr. Soni,
You have to calculate Bonus on the actual wages paid i.e, it can be on Basic or Net (Depending on your company policy).
Minimum Bonus : 8.33%, Maximum Bonus: 20%.
Eg:
1) Net Wages paid 5500
2) Bonus = 5500 * 60% * 8.33% = 274.89/-
The Maximum Bonus payable is ceiling of Rs.7000 ie., Rs. 1,400/-
Regards,
K. Akash
5th October 2016 From India, Secunderabad
Dear Prem Soni,
You have to pay bonus on state minimum wages or Rs.7000/- which is higher. In your case, your wages are lower then Rs.7000/- as such you are required to calculate statutory bonus on Rs.7000/- per month.
P K Sharma
5th October 2016 From India, Delhi
Dear Mr. Soni,
My understanding is:
Section 10 – already speaks about minimum amount to be paid – 8.33% of earned salary / wages or Rs. 100/= whichever is higher
Section 12 – speaks about maximum ceiling amount to be considered for the purpose of bonus calculation
As per the recent amendment – Rs. 7000/= or minimum wages whichever is higher means if the notified minimum wages are more than Rs. 7000/= the bonus required to be calculated @ minimum wages.
In your case, you can confine your bonus calculations to Rs. 5226 – notified minimum wages or actual wages Rs. 5500/= subject to your company’s policy decision.
Bonus need not be calculated for the ceiling limit Rs. 7000/=
6th October 2016 From India, Madras
Dear Prem Soni,
You have to pay bonus on state minimum wages or Rs.7000/- which is higher. In your case, your wages are lower then Rs.7000/- as such you are required to calculate statutory bonus on Rs.7000/- per month.
P K Sharma
================================================== ==========
Dear Prem,
As above PK Sharma Statement is 100% right, but you can add working day in above calculation like
the salary is below 7000 PM the if, employee absent 1 days in particular month and this month working day is 26 then bonus calculation is
bonus calculation formula is = 7000 / Working day * Actual working days (month working day-actual working day)
Paresh Patel
Asst. Manager
Pharmatech Process Equipments
6th October 2016 From India, Ahmedabad
Minimum wages of raj.. Of unskillied 5226.
Situation:
1) your emoloyee basic salary is below from minimym wages..... Then you have to pick 5226 fir calculation.
2) your employee basic salary is more than minimum wages like 6200. The you need to pick 6200.
3) your employee basic salary is like 8000 then you can pick 7000(celling limit).
Celling limit is upper limmit as per new revised bonus act.
Minimum wages are lower limit.
I done bonus work in my company and confirmed all above with dept also.
6th October 2016 From India, Rajkot
As per New Bonus Act, the following points are bit confusing:
1. The Bonus to be calculated whether @ Rs.7000/- or Minimum wages which is on higher basis.?
2. Whether the minimum wages lesser the amount of Rs.7000/- then Bonus Calculation will be on lesser amount?
Kindly guide us
S,N.Bhattacharya
Business Associate
Ual-Industries Ltd,
16, Mayfair Road,
Kolkata 700 016
6th October 2016 From India, Kolkata
Dear sirs,
The said BA Amendment needs full reading from which it is revealed that in case the minimum rate of salary in each category (un-skilled, semi-skilled & skilled etc) in scheduled employment as fixed by UP Government / Appropriate Governments under Minimum Wages Act is higher than Rs. 7,000 /- in that event the calculation shall be made at that higher rate fixed by Government otherwise it shall remain limited to Rs. 7,000 /- per month. It is further submitted that in UP and almost in all states the wages revises every six months ; thus the earned wages as per revised wages shall be required to be taken into consideration for that period(s).Further in UP and possibly by other States , MW are different for Scheduled employment who employ less than 50 workers and for more than 50, the MW are different as WAGES are notified under ID Act. These aspects must be understood when interpreting Notifications before calculation of Bonus payable.
Regds,
RDS Yadav
Labour Law Adviser,
Navtarang HR Services,
NAVTARANGHRS(AT)GMAIL(DOT)COM
6th October 2016 From India, Delhi
Dear Mr. Soni,
Section 10 – speaks about minimum amount to be paid – 8.33% of earned salary / wages or Rs. 100/= whichever is higher
Section 12 – speaks about maximum ceiling amount of Rs.7000/- only in cases where the wage or salary is more than the threshold limit, in such cases applicable ceiling to be taken into account is Rs.7000/- or state Govt notified minimum wages whichever is higher for the purpose of bonus calculation.
In the instant case the provision applicable is Section 10 and not Section 12 since actual wages paid is less than Rs.7000/- and also Govt notified wages is also less than Rs.7000/-.
You are to pay bonus on actual earning i.e. Rs.5500/-@ 8.33% or as you may wish.
Patodia
6th October 2016 From India, Kolkata
Dear Mr. Soni and others,
Do you employ less than 50 workers ?
Do you fall under Scheduled employment under Min. wages Act?For example; Glass mfg industries are in list of Scheduled employment.
Are you engg. company with more than 50 workers?
Read with answers the BA AMENDMENT and MW notification together to reach right solution.
Regds,
RDS Yadav
6th October 2016 From India, Delhi
Thanks to all for your kind suggestion and valuable feedback.....!
6th October 2016 From India, Alwar
I agree with Mr. PK Sharma,
In the case of the query, wages ceiling is Rs.5500 which is less than 7000, but for the bonus calculation, min 7000 has to be taken and accordingly statutory bonus payable is 7000.
PL Kanthan
6th October 2016 From India, Thane
Hitherto, we are restricting the Bonus wages to the Ceiling wage if the wages exceed ceiling wage of Bonus.
As of now also the same procedure.
Recently, the Govt. revised the Bonus Act stating that if the minimum wages prescribed beyond ceiling wage, the bonus to be calculated on minimum wages only but not on ceiling wage. But several companies challenged the revision of Bonus Act. It has to be decided by the courts.
But as of now the calculation of Bonus on the ceiling wages only.
7th October 2016 From India, Hyderabad
Mr.Soni,
A Minimum Bonus of 8.33% shall be payable as per Sec 10 of Bonus Act. In your case, you need to take Rs.5500/- per month as Bonus Salary. If any Loss of Pay was reported in any particular month that can also be proportionally deducted from the above salary. In such a case, the Maximum Bonus @8.33% would works out to Rs.5500/-
7th October 2016
Dear All,

The amendment in original is being reproduced here under:-

MINISTRY OF LAW AND JUSTICE (Legislative Department) New Delhi, the 1st January, 2016/Pausha 11, 1937 (Saka)

THE PAYMENT OF BONUS (AMENDMENT) ACT, 2015 NO. 6 OF 2016 [31st December, 2015.] An Act further to amend the Payment of Bonus Act, 1965.

BE it enacted by Parliament in the Sixty-sixth Year of the Republic of India as follows:—

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.

The following Act of Parliament received the assent of the President on the 31st December, 2015, and is hereby published for general information:—

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.

3. In section 12 of the principal Act,—

(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;

(ii) the following Explanation shall be inserted at the end, namely:—

‘Explanation.—For the purposes of this section, the expression ‘‘scheduled employment’’ shall have the same meaning as assigned to it in clause (g) of section 2 of the Minimum Wages Act, 1948.’.

Now where is the confusion. Section 12 which stipulate ceilings / restriction of calculations is amended and clearly says " seven thousand rupees or the minimum wage for the scheduled employment, as fixed by the appropriate Government, whichever is higher’’ shall respectively be substituted;

So many experts in the thread are doing wrong interpretations.

P K Sharma
8th October 2016 From India, Delhi
Dear All,
My interpretation of latest Amendment to Bonus Act and as notified in the Gazette is :
1. Those drawing >=21,000 pm are not eligible for Bonus
2. Those drawing < 7,000 pm to be paid min. bonus 7000 if his/her attendance is full for the period(i.e. without any reduction in wages). Or 7000 devided by 312 days multiply by no. of attendance ( i.e. Rs.22.42 x no. of attendance)
3. Those drawing > 7,000 & < 21,000, then their annual min.wages multiplied by 8.33% as min. bonus.
If I am wrong, kindly correct me.
Regards
8th October 2016 From India, Thane
In Section 12, says that “Calculation of bonus with respect to certain employees. Certain employees means some specific class of employees & not all. Who is this specific class of employees? This specific class of employees is whose wages “Exceeds” 7000/- as clearly mentioned in Section 12. Hence if wages are not more than 7000/- calculation of Bonus will be calculated as per Section 10 or 11.
Accordingly, according to me, if Minimum Wages are less than 7000/-, actual wages would be taken. Further, in 2007, when the Bonus calculation limit was 3500/- in most of the states the Minimum wages was less than 3500/- and Bonus was used to calculate on actual wages earned.
The intent of recent amendment was only to revise the wages ceiling and not the change of calculation method.
Regards,
Kamlesh Kumar Agrawal
09824442149
12th October 2016 From India, Delhi
Thanks for such valuable input.I am enriched. S.N.Bhattacharya
12th October 2016 From India, Kolkata
It is very clear that the bonus is now to be calculated on Rs.7000/- or the State Wages whichever is higher. In most of the cases as the bonus is paid on yearly basis, computation of bonus is not difficult as at the end of year, we have the figures of actual basic drawn.
If the bonus is to be paid on monthly basis, it is better to be calculated on actual wages drawn.
12th October 2016 From India, Mathura
Dear Kamlesh Kumar Aggarwal ji,
Please go through the amendment once again and try to understand its intentions once again. Your interpretations are contrary to the language/meanings of the amendment.
P K Sharma
13th October 2016 From India, Delhi
I agree with Mr. A Radhakrishna & Mr. P K Sharma.
The latest amendment has increased the Min. Bonus amount as well as the wages ceiling. In any case, min. Rs.7000/- to be paid as Bonus if not eligible for higher bonus.
13th October 2016 From India, Thane
#Anonymous
Hello Everyone,
I have joined as HR Executive recently. One employee has joined in August 2016. His salary is 12k(10k+2k). 2k is variables. That he will get after completion of his probation.Will he eligible for bonus? If yes, how much and When?? On this Diwali ? I don't know when my company is giving bonus? I have no idea about bonus. So please someone help me. If I have asked a silly question then please suggest me. Thanks in advance.
Regards,
Gayatri
17th October 2016 From India, Cuttack
Case 1: In case salary/wages below Rs7000/ if we will pay bonus as per actual wages,
Case 2: in case salary/ wages above Rs7000/ if will pay bonus as per minimum wages,
Then where we will put 7,000/-?
According to new amendment in bonus act it clearly says the payment of bonus will be on Rs7,000/- or minimum wages fixed by the appropriate government whichever is higher.
It is my perception and I request seniors to put some light on this.
27th October 2016 From India, Bhubaneswar
suppose central rate for SW,SSW & USW accordingly 570, 481 & 370 .then basic wages will like 26*570=14820,481*26=12506 & 9620 in this circumstance boins will calculated on this basic wages or calculated on 7000.
plz reply our experts.
Mukesh Kumar
IR Manager.
3rd April 2019 From India
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