Understanding Bonus Limits: How to Record and Manage Exceeding Amounts in Registers?

Bonus Limit and Ceiling as per the Act

I have a question regarding the limit/ceiling of the bonus payable as per the act. I want to know the limit/ceiling of the bonus, and if one exceeds the limit, how do we show the same in the registers? Please provide me with detailed formats through which this can be maintained. I also want to know if the company is liable to pay a bonus in case an employee exceeds the ceiling/limit.

Regards

Bonus is calculated on the basic salary. The minimum percentage to be given as a bonus is 8.33%, and the maximum percentage is 20%. Anything given above 20% is called an ex-gratia payment.

Limit of the Bonus

The limit for calculating the bonus is Rs. 10,000/- on the basic salary. Anyone drawing a basic salary that exceeds Rs. 10,000/- is ineligible for a bonus as per the act. There are two types of bonuses: one is the statutory bonus, and the other is a customary bonus. You have to show only the statutory bonus paid in the register maintained in Form C and D as per the bonus act. The company is not liable to pay a bonus if anyone crosses the limit.

Regards

Dear All,

Kindly clarify for me if the bonus is paid above 20% of the basic salary. For example, if a bonus of 25% is paid, the additional 5% would be considered ex gratia.

Regards,
Suman

Anyone who draws a basic salary of more than ₹10,000 is not eligible for a bonus. However, if the company wishes, they can choose to give it or not.

Dear HR team,

I have a situational query. Mr. X joined ABC Co. with an annual CTC of Rs 292,500 (Rs 22,500 per month and a yearly bonus of Rs 22,500). However, he resigned before completing one year. My question is: Is he still eligible for the bonus?

Regards,
Freddy.

If the basic + DA per month is less than Rs. 10,000/-, then only the statutory bonus is payable. Please confirm this aspect so that I can provide you with further advice. As far as the working duration is concerned, the statutory bonus is payable to an employee if they have worked for a minimum of 30 days in a financial year for which the bonus is to be paid. Please note that the bonus is always paid based on the number of days of service the employee has actually rendered. This means that if an employee has worked for 4 months in a financial year and resigns in the 5th month, they are entitled to the statutory bonus as they have worked for 30 days, but they will only receive the bonus for the 4 months worked and not for the entire period. Please let me know if you need further clarification or assistance. Thank you.

The employee is in the executive (Assistant Manager) category, and the bonus indicated in his appointment letter was part of the CTC (not a statutory bonus). However, no performance or profit-based conditions are mentioned in his appointment letter. In this case, if the company is not paying the bonus at the time of Full & Final settlement, can he go the judicial way? Please advise.

Regards,
Freddy

I am confused about whether the word "Salary" or "Wages" in the Bonus Act is inclusive of Basic + D.A. or Basic + other allowances. Please clarify what is deemed correct according to the act. The Bonus limit is based on Salary or wages up to 10,000, but is it Basic + D.A. or the gross salary? Additionally, our company does not pay D.A. Our salary structure comprises Gross = Basic + HRA + Medical Allowance + Transportation Allowance + Education Allowance. Kindly confirm if all of these components fall under the definition of Salary or Wages in the Bonus Act.

Thank you.

Firstly, your basic salary (basic + DA) must be up to 10,000, not more than that, to qualify for a bonus.

Secondly, you must have worked continuously for 30 days in the accounting year.

Thanks & regards,

[QUOTE=Heena_Bhola;1691367] Hi, Yes, first, your basic salary (basic + DA) must be up to 10,000, not more than that, to get a bonus. Secondly, you must have worked continuously for 30 days in the accounting year.

Thanks & regards, Thank you so much for your help. I need one more favor, could you please email me the amendment where it is mentioned that bonus eligibility depends on basic + D.A.? My email address is: [Email Removed For Privacy Reasons]

Thanks & Regards.

If someone is receiving a salary of Rs. 11,000 per month, are they eligible for a bonus?

I want brief information on bonus calculation. For example, eligibility, limit, calculation, and examples.

Dear team,

I am inquiring about the minimum number of days per month required to be eligible for the statutory bonus. Additionally, I would appreciate a clear formula for calculating the bonus in terms of months or days as follows:

Basic salary + DA (not exceeding 10,000/-) * number of days per month * 8.33

Thank you.
Guleriya

Dear all,

Please share the ESIC calculation, PF calculation, and bonus calculation with the act.

Thanks and Regards,
Rajesh Paswan

Dear All,

I would like to know more about employee benefits. Is it mandatory to provide a bonus as per the act? Are there any rules and regulations for providing bonuses? Is it applicable if a company processes a resolution to withhold bonuses for irregular employees? If processed, can we apply the resolution to existing employees within the organization? I would appreciate a valuable reply.

Kind regards, [Your Name]