To calculate the bonus, first, determine the available surplus by deducting tax, depreciation, developmental rebate, etc., from the gross profit. It is recommended to consult an expert in this matter for better guidance. Subsequently, identify the allocable surplus, which is 67% of the available surplus for companies and 60% for Banking Institutions. Allocate this surplus among eligible employees, adhering to the following conditions.
If the allocable surplus is adequate for 20% or more, the maximum bonus is 20%. Any excess can be carried forward (up to another 20%) for the next four years, known as Set On. In case the allocable surplus is 8.33% or below, the bonus payment will be 8.33%. Any remaining amount can be adjusted over the next four years, referred to as Set Off. If the allocable surplus falls between 8.33% and 20%, the exact percentage should be paid.
Please note that 8.33% represents the percentage equivalent of 1/12, which equals one month's payment for one year. Similarly, 20% is 2.4 times the salary.
Ex-gratia is not a statutory requirement. It denotes payment beyond the ceiling or to employees outside the coverage limit.
Abbas.P.S