Understanding Bonus Pay: How Much Should You Expect on a Rs 79,000 Salary for 2008-09?

Hi,

I would like to know what the bonus payable is on the total annual basic salary of Rs 79,000 for the financial year 2008-09. The employee has been working since July 2007.

Bonus = $79,000/12 (months) = $6,583.33

Eligible bonus salary per month = $3,500

Minimum statutory bonus for 2008-2009 (8.33%) = $3,500 * 8.33/100 = $3499

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Hi,

Can you please explain to me the significance of the figure 3,500? We were under the impression that we needed to calculate 8.33% of 79,000.

BONUS ELIGIBILITY - WHO'S BASIC SALARY IS LESS THAN Rs. 10,000/-
FOR CALCULATION Rs. 3,500/- per month.
You should calculate on earned basic only (monthly)

The eligibility has increased to 10,000 now. This means an employee whose Basic and DA are up to 10k per month is eligible to get a bonus irrespective of whether the organization is making a profit or not. This does not apply to organizations that are in their infancy period, specifically the first five years from the date of incorporation, provided that such organizations are not making a profit or having an allocable surplus. The 3,500 amount is only for the calculation of the minimum bonus. Readers can revert for any queries.

As per the Bonus Act, the bonus shall be payable on a ceiling of Rs 35,00/-. The salary may be more than Rs 3500.

Dear all,

To determine eligibility, we need to consider a salary of Rs. 10,000. If an employee's basic salary exceeds Rs. 10,000, the company is not required to pay a bonus to that employee. However, if the basic salary is less than Rs. 10,000, the company must pay a bonus. When calculating the bonus earned, only the first Rs. 3,500 of the basic salary should be taken into account. In other words, the bonus should be calculated based on Rs. 3,500, not Rs. 10,000. This ensures the minimum bonus payment of 8.33%.

Thank you.

For calculation purposes, the following salary slabs are followed:

- Salary < 3500: Actual salary taken for calculation.
- 3500 <= Salary <= 10k: 3500 is taken for calculation.

For example, if the salary (basic + DA) is 2500 pm, then the bonus would be 8.33 * 2500 / 100 pm = 208.25 pm (2499 pa).

If the salary (basic + DA) is 6000 or 3500 pm, then the bonus would be 8.33 * 3500 / 100 pm = 291.55 pm (3499 pa).

Hope it's clear now.

Hi, I would like to know what the bonus payable on the total annual basic salary of Rs 79,000 is for the financial year 2008-09. The employee has been working since July 2007.

Bonus Calculation Formula

A formula is attached herewith for the calculation of the bonus.

It is not correct that an employee with a basic salary of up to Rs. 10,000 per month is eligible for a statutory bonus. The basic salary plus DA should be less than Rs. 10,000 per month.

Regards,
Varghese Mathew