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If Employees Gross salary is above than 21000/- rs. then how to we calculate bonus ??

As per Law maximum Gross Salary is 21000/- Rs., & above then 21000/- is not applicable for the bonus.

for example;
if Gross Salary is 15000/- and Basic + DA is 8000/- then the bonus is: 8000* 8.33% = 666/- Rs.
if Salary is 22000/- then how to we calculate the bonus ??

From India, Chennai
Labour Law & Hr Consultant
Ceo-usd Hr Solutions
Sr. Executive Hr


Dear Sunil,

When the monthly salary of an employee exceeds the threshold of Rs.21000-00, he escapes from the ambit of the definition of the term " employee " u/s 2(13) of the PB Act,1965 and from then onwards he is not entitled to the statutory bonus contemplated under the Act. Till such point of time, his bonus amount shall be calculated as per section 12 of the Act applying the notional monthly salary of Rs.7000/= or the statutory minimum wages for that job WHICHEVER HIGHER IS.

From India, Salem

As per PB Act, the definition of -“salary or wage” means all remuneration (other than remuneration in respect of over-time work) capable of being expressed in terms of money, which would, if the terms of employment, express or implied, were fulfilled, be payable to an employee in respect of his employment or of work done in such employment and includes dearness allowance (that is to say, all cash payments, by whatever name called, paid to an employee on account of a rise in the cost of living), but does not include-
(i) any other allowance which the employee is for the time being entitled to;
(ii) the value of any house accommodation or supply of light, water, medical attendance or other amenity or of any service or of any concessional supply of food grains or other articles;
(iii) any traveling concession;
(iv) any bonus (including incentive, production and attendance bonus);
(v) any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the employee under any law for the time being in force;
(vi) any retrenchment compensation or any gratuity or other retirement benefit payable to the employee or any ex gratia payment made to him;
(vii) any commission payable to the employee.
Explanation. – Where an employee is given in lieu of the whole or part of the salary or wage payable to him, free food allowance or free food by his employer, such food allowance or the value of such food shall, for the purpose of this clause, be deemed to from part of the salary or wage of such employee.

As per the above definition, the salary for Bonus eligibility will be on Basic & DA. Therefore, it is not monthly gross salary.

Moreover, Bonus is deferred wages i.e. in 2021 the Bonus will be paid for 2020 depending on accounting year of the organization. Accordingly, the Basic & DA amount to be considered for 2020 not for the payable year 2021.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531

USD HR Solutions – To Strive towards excellence with effort and integrity

From India, New Delhi
What should be taken as base to calculate the bonus amount?
From India

For Bonus calculation the base will be 7000/- or minimum wages of the grade whichever is higher. If the Basic & DA is less than 7000/- , it will be on actual Basic & DA.

% of Bonus will be calculated on the basis of Available surplus, allocable surplus, set on & set off. % of Bonus vary between 8.33% to 20%.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531

USD HR Solutions – To Strive towards excellence with effort and integrity

From India, New Delhi
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