Confused About Bonus Calculation with Leave and Holidays? Let's Figure It Out Together

Hi all,

Please help me out with the calculation of the bonus. I am a bit confused about the ceiling and the number of working days. If an employee has leave without pay in a particular month and 7 holidays (including Sundays, total 31 days), how should I calculate the bonus for that particular month? Also, if an employee's basic pay is more than Rs. 3500, should they not be considered for a bonus?

Thanks

Bonus Eligibility

Sec. 8 of the Payment of Bonus Act defines eligibility as 'not less than 30 working days.' An employee who works in a calendar year for 30 working days is eligible to receive this pro-rata bonus. Bonus, considered as 'deferred wages,' is calculated based on the working days on which wages were earned.

The ceiling limit for eligibility, as per Sec. 2(13), continues to be Rs 3500.00. The calculation of bonus (Sec. 12) when the salary exceeds Rs 2500.00 shall be calculated only up to Rs 2500.00.

Hope this clears your doubts.

Hi, thanks for your query.

I asked in that particular month (though the employee has worked more than 30 days in a year). Also, if an employee's salary exceeds Rs. 3500 in a month, will he automatically be out of bonus calculation.

Hi,

The bonus is on a financial year basis, and eligibility will be for that financial year. Hence, 30 days would have to be reckoned for that year, not isolated.

Yes! Above Rs. 3500.00, there is no allowed payment under the act.

Rajaram

Yes, the person is entitled to a bonus, provided he/she has worked for the stipulated period of time (as per the factory/mines/establishment) he/she has worked in the previous year.

Dear All,

Please help me with the calculation of bonuses. If an employee is absent for 7 days in a particular month, how should I calculate the bonus for that month? Also, if an employee's earned salary exceeds Rs. 2500.00, which is calculated at a rate of 20% of the salary, assuming the salary is Rs. 2500.00 per month. (2500 * 20% = 500) OR (1917 * 20% = 383)

Thanks,

Hi All,

There is a new gazette order for the qualifying amount for Bonus. The entry criteria are now Rs. 10,000, up from the earlier Rs. 3,500. This means that an employee whose salary is less than or equal to Rs. 10,000 is eligible for statutory bonus, with the minimum being Rs. 3,500 as opposed to Rs. 2,500 previously.

Regards,
Ravindra

I am working in Pune and facing an issue regarding the bonus. My company provides a bonus amount exceeding 20% to the employees. Currently, we calculate the bonus based on basic salary + HRA + conveyance. However, many employees receive other allowances within their monthly gross pay.

Bonus Calculation Query

My question to all my HR friends is whether these additional allowances should be included in the bonus calculation. Please reply.

Thanks,

Sonali Ghodke

Hi Sonali Ghodke,

The act states that BASIC + DA should be used for Bonus calculation purposes. The act always specifies a minimum requirement of Minimum (Basic + DA * 8.33 or 20%). If your organization decides to offer more than this minimum, they can do so, provided that it is common for all employees.