As per the Payment of Bonus Act, 1965, the bonus is payable to those employees whose salaries per month do not exceed Rs 10,000. For salaries falling between Rs 3,500 and Rs 10,000, the bonus will be calculated by considering the salary as Rs 3,500.
The statutory minimum bonus payable is 8.33%, and the maximum bonus is 20%. The rate of bonus will depend on the profit available to the company.
If a 10% bonus has been agreed upon, then the calculation should be based on the Basic + DA salary of each individual employee for the year, taking 10% of that to determine the bonus amount. It is important not to simply multiply one month's salary by 12, as there may be months with lower salaries due to leaves. For employees with a basic pay exceeding Rs 3,500 but not exceeding Rs 10,000, the bonus can be calculated as if the monthly salary were Rs 3,500 (Basic + DA). In practical cases where trade unions negotiate, the most reasonable percentage for the company will be determined.
In your case, the calculation would be (Basic Salary + D.A) x No. of months during the FY x Percentage agreed.
Therefore, 3500 * 12 * 8.33 = 3498.6 (rounded to 3500).
Thank you.