Bonus is to be paid on the actual wages for the year (basic + DA paid each month for the entire financial year)
The act provides a ceiling. The ceiling is that if the wages is higher than ₹7000 per month, or higher than minimum wages where minimum wages is more than ₹7000 per month, the bonus will be paid as if the employee had wages of ₹ 7000 (or minimum wage rate, whichever higher).
I hope you are now clear about the distinction between the two of them
Ceiling and actual wage words is not mentioned nor used in bonus act anywhere. And where written in act to calculate bonus on actual who is getting less than 7000/-. This is individual understanding and clearly written in amendment 7000/- or Minimum wage which ever is higher .
Objective of ceiling limit 7000 is
To reduce the burden of employer as well as to provide the reasonable amount as bonus to all eligible employees/workers therefore irrespective of actual Basic plus DA calculate annually bonus either on 7000
or on your state minimum wages for scheduled employed whichever is higher as per sec 12,
Calculating the bonus on actual basic plus DA in case of less then 7000 is just
To avoid the statutory dues & which is subjected to punishment & penalties as
Defined in sec 28 of bonus act. Hence even if basic plus DA is less then ceiling limit always
Calculate bonus either on ceiling limit or on state minimum wages for scheduled employed whichever is higher,
Thanks & Regards
Practicing In Accounts, Finance, Taxation & Labour Laws
I don't know as to why there is doubt or confusion. The persons getting higher than Rs.7000/- and up to Rs. 21000/-, their bonus shall be calculated as if their salary or wages is Rs. 7000/- or minimum wages, whichever is higher. The persons getting less than Rs.7000/-, their bonus shall be calculated on the actual pay ( basic plus DA) drawn by them.
Member since August, 2011