Dear Seniors,
Greetings
I have query on Bonus Act.
I am working with hospitality firm which provide manpower in hospitals, hotels and companies at minimum wage rate (Delhi minimum wage rate)
We are giving minimum wage rate to our workers according to Delhi wage rate which is Rs. 13350/- (increased on 01/04/2017)
I have to calculate bonus for all employees next month. My query is on which rate I should calculate minimum bonus on –
Rs 13350 Which we are provided, increased by Delhi Govt. on 01/04/2017
Rs 9724 Which some co. are providing as there is Stay on increased wages (Rs13350/-)
Rs 7000 Amount which is capped for Bonus
Also if Employees salary (Basic + DA) is Rs 15000/-
Which amount to consider (15000 or 7000)?
Thank you in advance.
Gaurav
From United States, Baton Rouge
13Greetings
I have query on Bonus Act.
I am working with hospitality firm which provide manpower in hospitals, hotels and companies at minimum wage rate (Delhi minimum wage rate)
We are giving minimum wage rate to our workers according to Delhi wage rate which is Rs. 13350/- (increased on 01/04/2017)
I have to calculate bonus for all employees next month. My query is on which rate I should calculate minimum bonus on –
Rs 13350 Which we are provided, increased by Delhi Govt. on 01/04/2017
Rs 9724 Which some co. are providing as there is Stay on increased wages (Rs13350/-)
Rs 7000 Amount which is capped for Bonus
Also if Employees salary (Basic + DA) is Rs 15000/-
Which amount to consider (15000 or 7000)?
Thank you in advance.
Gaurav
From United States, Baton Rouge
Please calculate Bonus for the Year 2016-17 on the Basis of Minimum Wages Applicable or Rs7,000/- which ever is higher.Salary/Wage as per The Payment of Bonus Act means The Basic Salary, Dearness Allowance , Variable Dearness Allowance as applicable
From India, New Delhi
From India, New Delhi
You have to calculate wages (basic+DA) earned by employees in FY 2015/16. Since you pay wages @ Rs. 7000+ the other condition does not apply to you.
Quantum of bonus & its % for allocation is defined in act; it is basically accounting function. Paying 8.33% bonus if your org is more than 5 years old or it is younger but has made profit in FY is not legally correct thing to do.
From India, Mumbai
Quantum of bonus & its % for allocation is defined in act; it is basically accounting function. Paying 8.33% bonus if your org is more than 5 years old or it is younger but has made profit in FY is not legally correct thing to do.
From India, Mumbai
See the rule is:- Eligibility <= Rs. 21000/-(Basic+DA) Calculation:- Minimum Rs. 7000/- or Minimum wages which ever is higher.
From India, Pune
From India, Pune
Dear Gaurav,
First of all Bonus is a deferred wages i.e sitting in 2017-18 you are paying Bonus for accounting year 2016-17. What others have been explained are correct - you have to pay Bonus to those employees whose salary as per Payment of Bonus Act is up to Rs.21,000/- and the calculation will be on Rs.7000/- or Minimum wages which ever is higher if the Basic+ DA during accounting year 2016-17 was 7000/- or more. In case of less than 7000/-, it will be on actual Basic +DA. The minimum wages should be the average of 2016-17 Delhi minimum wages not the minimum wages as on date.
Thanks & Regards,
S K Bandyopadhyay (West Bengal)
USD HR Solutions
From India, New Delhi
First of all Bonus is a deferred wages i.e sitting in 2017-18 you are paying Bonus for accounting year 2016-17. What others have been explained are correct - you have to pay Bonus to those employees whose salary as per Payment of Bonus Act is up to Rs.21,000/- and the calculation will be on Rs.7000/- or Minimum wages which ever is higher if the Basic+ DA during accounting year 2016-17 was 7000/- or more. In case of less than 7000/-, it will be on actual Basic +DA. The minimum wages should be the average of 2016-17 Delhi minimum wages not the minimum wages as on date.
Thanks & Regards,
S K Bandyopadhyay (West Bengal)
USD HR Solutions
From India, New Delhi
Well explained all. Just clarify on some points
Wage calculation is done on
1. the wages earned in the financial year (April to March)
2. If the wage rate of employee is less than Rs. 7000/- for some period , Bonus need to be calculated on earned wages as if it is earned at wage rate Rs.7000/- for that period.
3. if wage rate of employee is 7000/- or more than Bonus need to be calculated on earned wages subject to maximum of wage rate as per ceiling.
4.There is no concept of average wage rate.
Thanks
Regards
From India, Ahmadabad
Wage calculation is done on
1. the wages earned in the financial year (April to March)
2. If the wage rate of employee is less than Rs. 7000/- for some period , Bonus need to be calculated on earned wages as if it is earned at wage rate Rs.7000/- for that period.
3. if wage rate of employee is 7000/- or more than Bonus need to be calculated on earned wages subject to maximum of wage rate as per ceiling.
4.There is no concept of average wage rate.
Thanks
Regards
From India, Ahmadabad
Well explained by all. Just to clarify on some points
Bonus calculation is done on
1. Ihe wages earned in the financial year (April to March)
2. If the wage rate of employee is less than Rs. 7000/- for some period , Bonus need to be calculated on earned wages as if it has been earned at wage rate Rs.7000/- for that period.
3. if wage rate of employee is 7000/- or more than Bonus needs to be calculated on earned wages subject to maximum of wage rate as per ceiling.
4.There is no concept of average wage rate.
Thanks
Regards
From India, Ahmadabad
Bonus calculation is done on
1. Ihe wages earned in the financial year (April to March)
2. If the wage rate of employee is less than Rs. 7000/- for some period , Bonus need to be calculated on earned wages as if it has been earned at wage rate Rs.7000/- for that period.
3. if wage rate of employee is 7000/- or more than Bonus needs to be calculated on earned wages subject to maximum of wage rate as per ceiling.
4.There is no concept of average wage rate.
Thanks
Regards
From India, Ahmadabad
Dear Mr. Khan,
Answer to your query are as follows:-
1. Financial year is April to March.
2. If in any financial year for some months wages is below 7000/- and in other months it is 7000/- or minimum wages which ever is higher, bonus calculation is done on monthly basis i.e. a x n1 + b x n2 + c x n3 = A. a is less than 7000/- and actual wage. b & c are 7000/- or minimum wages which ever is higher. n1 + n2 + n3 =12. Bonus % will be determine by available surplus, allocable surplus, set on & set off consideration anything between 8.33% and 20% and for the particular case it will be say 15% of A.
3. Already replied in point 2.
4.There is no concept of average wage. Whatever explain in point 2 which I mention as average wage for the general understanding.
Thanks & Regards,
S K Bandyopadhyay( WB)
USD HR Solutions
From India, New Delhi
Answer to your query are as follows:-
1. Financial year is April to March.
2. If in any financial year for some months wages is below 7000/- and in other months it is 7000/- or minimum wages which ever is higher, bonus calculation is done on monthly basis i.e. a x n1 + b x n2 + c x n3 = A. a is less than 7000/- and actual wage. b & c are 7000/- or minimum wages which ever is higher. n1 + n2 + n3 =12. Bonus % will be determine by available surplus, allocable surplus, set on & set off consideration anything between 8.33% and 20% and for the particular case it will be say 15% of A.
3. Already replied in point 2.
4.There is no concept of average wage. Whatever explain in point 2 which I mention as average wage for the general understanding.
Thanks & Regards,
S K Bandyopadhyay( WB)
USD HR Solutions
From India, New Delhi
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Bonus Calculation.xls
BONUS CALCULATION RULE (1).pdf