As per the existing Payment of Bonus Act, it is payable to employees whose salary (if you take Basic+DA only as salary for the purpose of payment of gratuity, calculation of leave enacshment or overtime wages or contributing PF, take the basic +DA or if you do not have DA in your salary take Basic salary alone or if you have a consolidated salary pattern, take the entire salary) does not exceed Rs 10000 per month. Now, while calculating the amount of bonus, take the salary of all employees whose salary exceed Rs 3500 as Rs 3500. That means, an employee whose bonus qualifying salary is Rs 9000 is eligible to get bonus. Now, if the rate of bonus is 8.33%, then the bonus is not 8.33% of 9900 but it is calculated at 8.33% of 3500 only.
The above illustration is on the basis of law and in practice bonus is always decided after a settlement arrived at between workers and management and in a settlement there is no scope for calculation of bonus as described above.
Madhu.T.K