Understanding Bonus Calculation: Do Years of Service and Company Profit Matter?

Hi Friends,

I have some knowledge about bonus calculation. We take Basic+DA (from April 2007 till April 2008) * 8.33%. Do we also have to take their number of years into consideration for bonus calculation, or only the BP + DA? I have another doubt. Is the bonus calculation based on the profit? Do every company follow the same policy of the calculation?

Thank you,
Jaanu

As per the Payment of Bonus Act, 8.33% is the minimum bonus payable to those employees coming under the wage ceiling fixed by the act. Profit-making companies have to pay the full bonus, i.e., 20% of the basic salary. There are many provisions regarding the same; you should refer to the Payment of Bonus Act.

Regards,
Nitin.