Hello Connections
I wanted a help for you all regarding suggestions on Diwali bonus , basically their are no terms or limitation in giving Diwali bonus but i want a help and also wanted to know what major companies do.
1 - Should bonus be provided equal to all employees in all grades ?
2 - Should bonus be given according to seniority ?
3 - Should bonus be given according to pay of employees ?
4- Should bonus be given equal to 1 year old employee and 5 year old employee ?
i have queries and i need suggestions as in my company i'm facing this issue that senior employees or older employees compare their value with new ones as their are no difference in providing bonus.
Kindly give your valuable suggestions
Thanks
Margi Bhatt
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Hi Margi,
Giving you the below gist of Entitlement, computation, Minimum Bonus, Time Limit for payment & register/ record to be maintained & returns due date in accordance with the Provision of the Bonus Act.
1. Entitled: Every employee who is drawing a salary or wage upto Rs. 21,000 per month and has worked for minimum period of 30 days in a year is entitled to be paid bonus.
2. Computation: Bonus is to be calculated on Rs. 7000 Or the minimum wage for scheduled employment, as fixed by the appropriate Government, whichever is higher.
3. Minimum Bonus: The Employer is bound to pay minimum bonus of 8.33% to all eligible employees every year.
4. Time Limit: The bonus to be paid within a period of 8 months from the close of the accounting year.
5. Register & records: The employer is required to maintain, in the prescribe forms, the following registers
(1) a register showing the computation of the allocable surplus Form- A (Maintained by finance team)
(2) a register showing the set-on and set-off of the allocable surplus Form -B (Maintained by finance team)
(3) a register showing the details of the amount of bonus payable to each of the employees, the amount of deduction if any, & the amount actuality paid - Form C
All the registers mentioned above is attached herewith for your reference.
6. Annual Return: Every Employer on or before the 1st day of February in each year has to file annual return in Form D.
If you have any query please contact me 7977261697.
Regards,
Vikrant
Only companies which make profit during the first five years of its formation shall pay bonus.
Bonus has nothing to do with seniority
Only employees getting salary of not more than Rs 21000 per month may be paid bonus
In respect of employees whose salary exceeds Rs 7000 but not over Rs 21000, the bonus may be calculated on Rs 7000 or the notified minimum wages.By notified minimum wages is meant that wages the government has notified as payable to the employees of the scheduled employment.
Since bonus is payable on the salary paid, the amount of bonus will vary according to salary.
The minimum bonus as per statute is 8.33% of the salary paid during the financial year.
Now coming to industry practices, majority of companies pay bonus without any restriction regarding the salary. As such persons who are paid more than Rs 21000 are also paid bonus. Since bonus is always a component of CTC, paying any higher percentage of bonus will not make any difference. However, most of the companies pay 8.33% as bonus.However, in companies where trade unions exist, the rate may even touch the maximum of 20%.
Giving bonus without considering the ceiling of Rs 21000 and computing it with reference to minimum wages is not normally followed. This is sound because the seniors whose salary would also be higher than the entry level employees will get more amount than what the others get as bonus.
Since bonus is paid for the financial year 2018-19, any employee who has not worked at least for 30 days in that year should be eliminated from the list of bonus qualifying persons.
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