How Do You Calculate Bonuses for Salaries Below and Above 10,000 Under the New Amendment?

Dear All,

Can anyone suggest bonus calculation examples for employees with basic salaries below 10000 and above 10000?

1. If employee A receives a basic salary of 7000 with no DA per month, what would be his bonus calculation under the new bonus amendment act?

2. If employee B receives a basic salary of 15000 with no DA per month, what would be his bonus calculation under the new bonus amendment act?

3. When substituting the word "three thousand five hundred" with "ten thousand," please explain this in detail with an easy example.

4. When substituting the word "two thousand five hundred" with "three thousand five hundred," please explain this in detail with an easy example.

I hope this group can assist me with this information. This is very urgent.

Regards,
Chetan Prajapati

Dear Mr. Vijay,

I appreciate your explanation; however, I would like to add a bit more information.

If an employee's basic salary is Rs7000 and DA is nil, under the new ceiling, they are eligible for a bonus because the limit is Rs10,000. The calculation for the bonus will be based on Rs3500, which means you need to calculate as if the basic salary is Rs3500. Let's assume a bonus rate of 10%. You should start calculating the salary from April to March. For example, if in April the employee was paid for 25 days, the salary should be adjusted proportionally for the bonus calculation based on Rs3500.

Calculation for April: Rs3500 * 25/30 = Rs2966. Therefore, for bonus calculation in April, even though the basic salary is Rs10,000, it will be considered as Rs2966.

Continue this calculation until March of the following year, then sum up all the basics and calculate 10% of the total for the bonus amount for the year.

All other points have been clarified by Mr. Vijay.

Thank you,
J. S. Malik

Hi,

In our company, the bonus is calculated based on the last March drawn salary. Since we do not have a dearness allowance, the bonus is calculated on the total salary. My question is, if a company runs under loss, should management still pay the bonus?

Dear Uma,

Calculating bonus based on the salary drawn in March is incorrect. If someone is absent for four days in March, their drawn salary will be reduced, resulting in a loss for them. Even if there is a loss, a minimum bonus must still be paid. The calculation of the loss cannot be done within one year; you need to maintain an A&B register of bonuses to determine the set on/off. However, the minimum bonus must be paid.

Regards,
J. S. Malik

Dear,

Please suggest, is it compulsory to maintain a Bonus register i.e., A, B, C for the Shop and Establishment Act? Currently, we are processing it through vouchers. Is this method sufficient or not?

Thanks & regards,
Bijoy Kumar Das
HR Executive
Candico India Limited.

Dear Bijoy,

It is mandatory to maintain an A&B register of bonuses; otherwise, how will you decide the percentage of the bonus to be paid? Bonuses should be paid based on the C register, not on the voucher. This rule applies to both factories and shops under the EST Act.

Thank you,
J.S. Malik

If an employee has a Basic + DA of Rs 10,000.00, then for bonus calculation, the amount will be Rs 3,500.00.

Regards,

Abhijeet Sawant

Dear Malik,

I met last drawn salary of March where the total gross drawn in the month of March. They calculate bonus without any deductions; they take gross into account. Employees who draw above 10000/- also paid a bonus. Is it necessary for employees who draw above 10000/- to receive a bonus?

Thank you.

Is it possible to get a notification stating that Basic + DA are the two components of salary which entitle any employee to get a bonus? If an employee is receiving a salary of 30,000 but his basic is less than 10,000/-, will he be eligible for a bonus under the act.