Eligibility for Payment of Bonus - HR says revised gross salary is above of Payment of Bonus ceiling - CiteHR
Umakanthan53
Labour Law & Hr Consultant
+1 Other

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Dear Seniors..! I am working in private company. My current gross salary is 22000/- . My HR informed to me that your revised gross salary is above of Payment of Bonus ceiling rs 21000/- Now onward your are not eligible for bonus as per payment of bonus act.
Please advice it is right. Bonus ceiling is rs 21000/- Gross or Basic or DA, If Basic + DA, please share the section and sub section of Payment of bonus act.

Dear Ankush,
As per bonus act please find below mentioned details for eligibility of Bonus.
1. Your Basic + Da salary will be 21000/- or below 21000.
2. You should work minimum 30 days in financial year.
Kindly note Bonus ceiling is Rs. 21000/- on Basic + DA.
Regards
Lavkesh Singh

Dear Ankush Rana,
Needless to say that the definitions of the terms " employee " vis-a-vis " salary or wage " u/s 2(13) and 2(21) of the Payment of Bonus Act,1965 baffle some people in respect of deciding the eligibility criterion for bonus. To put it straight and simple, you are not eligible to claim bonus under the Payment of Bonus Act,1965 since your monthly salary exceeds Rs.21000-00 and because of which you go out of the ambit of the definition of the term " employee " as defined u/s 2(13) of the Act.
Coming to the common interpretation, some people erroneously take into account the meaning of the definition of the term " salary or wage " in an isolated fashion and hold that only the basic and the dearness allowance and leave out the entire excluded items in the definition. One has to note the phrase " means all remuneration .... be payable to an employee " occurring in the definition. Whatever payable to the employee as per the terms of the contract of employment is remuneration. The minimum and maximum bonus contemplated under the Act respectively under sections 10 and 11 as particular percentages to the salary or wage earned only. Therefore, the import of the definition is to segregate those components which are paid as supplementary or incurred out of the employer's statutory liability from the so-called all inclusive remuneration only for the purpose of computation of bonus and not to put any interpretative hassle on the already precisely defined term " employee "u/s 2(13) of the Act.
When we analyse both the definitions together, we would find that the phrase " salary or wage " employed in sec.2 (13) indicate only the unsegregated remuneration mentioned thereof in sec.2(21). Conclusively, therefore, the salary mentioned in sec.2(13) is only the gross salary. The moment one exceeds this limit, he is not an employee for the purpose of the Payment of Bonus Act,1965.

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