Confused About Bonus Calculation: Is It 8.33% of Basic+DA or a Fixed Amount?

Dear Mr. Malik,

Thank you very much for your valuable response. I have a small query. If an employee is receiving Basic+DA INR 6000, will the bonus be calculated at 8.33% on 6000 or will they receive a fixed 3500?

Please help.

Regards,
Jagdish Pathak
# 9811488664

Dear All,

Please read the attachment and inform me whether the bonus will be applicable on 3500/= or the actual salary (basic + DA) if it is above 3500/= and below 10,000/= since the limit has been increased up to 10,000/=.

Regards,
Jagdish Pathak

Dear Jadish,

It is clearly mentioned in the attached file, i.e., in section 12 of the Payment of Bonus Act, that the bonus shall be calculated at ₹3500/-. Section 2(13) provides the definition of an employee under the said act. Every employee receiving wages not exceeding ₹10,000 per month is eligible to receive a bonus.

reebi

Dear All,

Please find attached "Bonus (amendment)". The limit has increased up to 10,000/=. Now, please suggest whether the bonus will be calculated on 3,500/= or basic + DA if it is 6,000/=.

Regards,
Jagdish Pathak

Dear All,

Please find attached "Bonus (amendment)". The limit has increased up to 10,000/=. Now please suggest whether the bonus will be calculated on 3,500/= or basic + DA if it is 6,000/=.

Regards,
Jagdish Pathak

Actually, there is no fixation of bonus, but as per government rules, the company must pay a bonus of 8.33% to the employees, whether the company is in profit or loss. From my knowledge, there are various employers who pay a bonus equivalent to the employee's salary (e.g., if it is Rs. 10,000/- or Rs. 15,000/- per month).

Meanwhile, there is also a rule for the fixation of bonus, which states that if the salary is above Rs. 3,500/- per month, then the bonus will be fixed at Rs. 3,500/- instead of 8.33% of the total salary.

When both rules are present, i.e., either 8.33% or Rs. 3500/- (fixed), employers will consider their own benefit. If salary in all (consolidated) is above Rs. 3500/- (no bar), then the employer can fix the bonus as Rs. 3500/-. If the consolidated salary is below Rs. 3500/- per month, then a bonus at 8.33% will be applicable in such a situation.

Dear Jagdish,

If a person is getting 10,000/-, the bonus limit will be 3,500/- for 8.33%. If the management announces it for a 20% bonus, then you have to add that balance of 12.67%, making the payable limit 10,000/-.

Thanks & Regards

Dear all,

Could anyone kindly provide me with the details for which years we have to pay the amended bonus? Is it for the accounting years 2013-14 & 2014-15 or only for 2014-15?