Hi All,
I tried to read from different sources and this is what I understood as part of calculation
• If an employee earns more than Rs 10000/- pm as a part of wages or salary then he/she is not eligible for bonus.
• if pm wages are < 10000/- then the bonus calculation can be done as
First criteria is that every such employee should at least get 8.33% of his salary (basic+da) earned around the yr
= (Basic pm + DA pm )*8.33%*No of months of service
** basic +da can be taken as max Rs 3500/-
If employer wishes to give more than 8.33% of bonus then max percentage which can be used is 20%. In such cases the extra funds are allocated n if they fall anywhere b/w 8.33% or 20 % then that amount is paid. I f they are more than 20% then max limit is 20% only..
In case employer has fewer funds then too 8.33% of bonus should be paid.
Refer to the link
icai.org
Bare Act - The Payment of Bonus Act, 1965 <link updated to site home> ( Search On Cite | Search On Google )
First one has got various cases which make understanding clear...second one has got the nitty gritties of the act...
I hope I understood it right. Kindly correct me if anything has been stated wrong.
Regards
Neha