What is the bonus calculation formula?
What is the bonus calculation formula in case the allocable surplus is more than wages, given the limits of 8.33-20%?
I found the formula on this website: https://www.labourlawreporter.com/wp...PT-shushil.pdf
Formula:
(Allocable Surplus) X 100 / (Salary and wages of the employees eligible for Bonus)
From India, Meerut
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What is the bonus calculation formula in case the allocable surplus is more than wages, given the limits of 8.33-20%?
I found the formula on this website: https://www.labourlawreporter.com/wp...PT-shushil.pdf
Formula:
(Allocable Surplus) X 100 / (Salary and wages of the employees eligible for Bonus)
From India, Meerut
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Bonus Calculation Percentage
What you have mentioned is the percentage of bonus calculation. Here, salary means bonus-eligible salary, which is ₹7000/- or minimum wages, whichever is higher. If the allocable surplus is more than the bonus-eligible salary for all eligible employees (Basic and DA ₹21k or less in the previous financial year as bonus is deferred wages), then the bonus percentage will be more than 8.33%. This can be calculated in the following way.
Calculation Method
Rs. x is required to pay a minimum bonus of 8.33%. Therefore, allocable plus (say A, which is more than x) can pay a bonus = (x / 8.33 * A)%. If it is more than 20%, then the maximum amount equivalent to 20% will be paid as a bonus, and any excess amount beyond the 20% bonus will be set on.
S K Bandyopadhyay (WB, Howrah)
CEO-USD HR Solutions
[Phone Number Removed For Privacy-Reasons]
[Email Removed For Privacy Reasons]
www.usdhrs.in
From India, New Delhi
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367What you have mentioned is the percentage of bonus calculation. Here, salary means bonus-eligible salary, which is ₹7000/- or minimum wages, whichever is higher. If the allocable surplus is more than the bonus-eligible salary for all eligible employees (Basic and DA ₹21k or less in the previous financial year as bonus is deferred wages), then the bonus percentage will be more than 8.33%. This can be calculated in the following way.
Calculation Method
Rs. x is required to pay a minimum bonus of 8.33%. Therefore, allocable plus (say A, which is more than x) can pay a bonus = (x / 8.33 * A)%. If it is more than 20%, then the maximum amount equivalent to 20% will be paid as a bonus, and any excess amount beyond the 20% bonus will be set on.
S K Bandyopadhyay (WB, Howrah)
CEO-USD HR Solutions
[Phone Number Removed For Privacy-Reasons]
[Email Removed For Privacy Reasons]
www.usdhrs.in
From India, New Delhi
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The excess remains with the company.
Set on and Set off Mechanism
In following years, if the allocable surplus is less than 20%, it will be met from the excess of previous years.
Please read the section on set on and set off, and you will be clear.
From India, Mumbai
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Set on and Set off Mechanism
In following years, if the allocable surplus is less than 20%, it will be met from the excess of previous years.
Please read the section on set on and set off, and you will be clear.
From India, Mumbai
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Set On and Set Off Process
Excess will remain in the company as Set On. Both Set On and Set Off will continue for 4 years, and in the 5th year, the 1st-year amount will be returned to the company's account. This will be a continuous process. Any Set On or Set Off will be adjusted with the following year's bonus calculation if required. As a former employee of Philips India, I have noticed that there were years when there was a Set On every year for more profit/allocable surplus.
Regards, S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions [Phone Number Removed For Privacy-Reasons] [Email Removed For Privacy Reasons]
From India, New Delhi
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Excess will remain in the company as Set On. Both Set On and Set Off will continue for 4 years, and in the 5th year, the 1st-year amount will be returned to the company's account. This will be a continuous process. Any Set On or Set Off will be adjusted with the following year's bonus calculation if required. As a former employee of Philips India, I have noticed that there were years when there was a Set On every year for more profit/allocable surplus.
Regards, S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions [Phone Number Removed For Privacy-Reasons] [Email Removed For Privacy Reasons]
From India, New Delhi
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I believe you are aware of obligations under the Payment of Bonus Act (which is being subsumed in the Code on Wages, 2019) which involves the preparation/filing of various Forms - A, B, C, D, and a format for arriving at 'Allocable Surplus' as per the provisions of Sec. 2(4) of the PoB Act. This includes 'set-off/set-on' procedures. Soon after the preparation of your Final Accounts, you'll arrive at the 'Allocable Surplus'. I have attached useful notes on the subject which may provide some guidelines at this juncture.
From India, Bangalore
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From India, Bangalore
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Allocable Surplus for Bonus.pdf
HOW TO SET UP HR DEPT.doc