Meaning Of Basic Pay Under Bonus Act

Hi All,
Kindly guide me on the following issue-
We are paying Gross Salary, divided into following components 50% basic + 50% flexi plan. Under Flexi plan we offer the employee to opt best suited options for him. Hence the components came as HRA, Food Coupons, Medical reimbursement and Sp. Pay.
Sp. pay is the balance amt. left after all other components in the Flexi plan, and is taxable.
e.g. Gross Salary 4lac, Basic 2lac and 2lac p.a. is Flexi plan (1lac HRA, 13k Food Coupons, 15k Medical and rest 72k will be Sp. Pay). Hence we may say that this is fixed amt. based on choice of employee, for the Financial Yr.
My query is for calculating salary (eligibility criteria of 10k) this Sp. pay will be considered as part of Salary or not.
Thanks in advance.
Swati Saxena

Unless otherwise provided Special Pay will be taken as part of salary for calculation of bonus. This is so because you have no Dearness Allowance in your pay structure. I doubt, this will attract EPF contribution also.
In any manner, the maximum bonus qualifying salary is Rs 3500 only though employees whose salary (Basic+ DA) is not not more than Rs 10000 are eligible for Bonus.
Regards,
Madhu.T.K

as the eligibility criteria the salary should not be more than 10,000 or it is the basic which should not be more than 10,000 ???

Ms.Swati,
As per the payment of bonus act, bonus payable max.8400 and qualifying salary is Rs.3500/- only (20% of 3500=700 * 12 = 8400). The employee basic should not exceed Rs.10000/- to avail bonus. Upto Rs.10000/- basic, bonus is compulsory and if you have DA then it should be inclusive od DA but at any point of time should not cross above eligibility criteria.
Santosh

Dear Swati,

Greetings for the day :),

As per the payment of bonus act,

• Bonus payable max.8400
• Freezed salary for calculation of Bonus is Rs.3500/-only(it is not eligiblity criteria eligiblity criteria is salary below 10000/- and 30 days employment in an establishment)
• Bonus will be Minimum 8.33 % and Maximum 20% of 3500
• It will be given calculated a follows:

1. 8.33% of 3500 = 291.55 X 12 = 3498.60
2. 20% of 3500 = 700 X 12 = 8400

• The employee Gross should not exceed Rs.10000/- to avail bonus

Hi friends

Kindly solve my problem

As per my information qualifying amount for bonus is Basic + DA

But as per bonus act the mentioned Meaning of salary is as below

“salary or wage” means all remuneration (other than remuneration in respect of over-time work) capable of being expressed in terms of money, which would, if the terms of employment, express or implied, were fulfilled, be payable to an employee in respect of his employment or of work done in such employment and includes dearness allowance (that is to say, all cash payments, by whatever name called, paid to an employee on account of a rise in the cost of living), but does not include-
(i) any other allowance which the employee is for the time being entitled to;
(ii) the value of any house accommodation or supply of light, water, medical attendance or other amenity or of any service or of any concessional supply of food grains or other articles;
(iii) any traveling concession;
(iv) any bonus (including incentive, production and attendance bonus);
(v) any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the employee under any law for the time being in force;
(vi) any retrenchment compensation or any gratuity or other retirement benefit payable to the employee or any ex gratia payment made to him;
(vii) any commission payable to the employee.

Kindly clarity me qualifying amount for bonus is basic+da or Gross

And minimum bonus payment amount and if salary is Rs 8,000.00 pm

Ravikumar