a-gupta1672191
I'm a proprietor who was in profit in FY 22-23. My consultant has told me that for bonuses, we need to use minimum wages for specific skill levels (not 7000).
Support 8.33% bonus is payable for a driver(skilled) whose minimum wage in my state is Rs. 14000.

So will bonus be calculated on base Rs. 14000 salary or Rs 7000 in this case?
Thanks

From India, Meerut
nanu1953
334

Consultant is right. Bonus has to be calculated on the basis of minimum wages not on 7000/- if minimum wages is more than 7000/-. Now what is essential that bonus has to be calculated as per schedule of bonus Act. For one proprietor how it will be calculated is required to discuss with appropriate person - may be charter accountant or any consultancy firm.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531
skb@usdhrs.in

From India, New Delhi
hr@trafopower.com
Correct bonus will paid as per minimum wages in state not on 7000 rupees. As per bonus act.
From India, Agra
a-gupta1672191
I'm a proprietor and as per income tax AY 23-24 I've allocable surplus of Rs. 58 lacs.
2ndly my labour registration was from 1/11/2023

I'm attaching calculation from my CA.

Now how much bonus do I need to pay to employee who salary was below 21001 ?
8.33-20%?

From India, Meerut
Attached Files (Download Requires Membership)
File Type: pdf Allocable Surplus for Bonus.pdf (198.1 KB, 0 views)

nanu1953
334

I am not an accountant and considering your allocable surplus figure 58 L is correct. To calculate % of bonus you first determine the bonus salary / wage which should be 7000/- or minimum wages of the employees who are eligible for bonus. Find out how much amount will be required to pay minimum bonus (8.33%) to the eligible employees. If it is less than 58 L then by unitary method determine the % of bonus. If even after paying the 20% bonus there is surplus money, then money equivalent to 20% maximum will be reserved as Set On. If there is any shortfall to pay minimum bonus , then the excess amount above 58 L will be Set Off.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531
skb@usdhrs.in

From India, New Delhi
a-gupta1672191
I asked 2 senior consultants who handle more than 100 clients in Delhi, they told me just pay 8.33% and everybody pays the same.

2ndly I should pay the same % in bonus to everyone. I should not pay 30% to one while 8.33% to another. What is your view?

From India, Meerut
nanu1953
334

Unfortunately many consultants and HR guys are not properly aware about PB Act. I have also client who always paid 8.33% bonus without calculating it proper way even after repeated advice. I would suggest you to read payment of bonus act. It is a fact that many organizations in India without calculating bonus as per act paying 8.33% years after years.

As per schedule-II of PB Act clearly shown how to calculate bonus. There is also example of calculating Set On and Set Off in the PB Act. As per PB Act statutory bonus has to be calculated on the basis of gross profit, available surplus, allocable surplus, Set on & Set off. Very few organizations follow the above path. Moreover, implementation authority is very weak and not visiting organizations to implement / train employer.

After calculating bonus as per PB Act ( let suppose it is 10% ) , you will be required to pay bonus 10% to all eligible employees whose basic and DA in the previous financial year was 21,000/- or below as bonus is deferred wages. Those who are not eligible, you may also pay them as per your capacity to pay which may be 8.33% not as bonus but as ex-gratia.

S K Bandyopadhyay ( WB, HOWRAH)
CEO-USD HR Solutions
+91 98310 81531
skb@usdhrs.in

From India, New Delhi
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