Is the Bonus Payment Ceiling Still ₹3,500 or Has It Increased to ₹5,000?

Please let me know the ceiling limit for the payment of bonuses at present. Is it still ₹3,500/- or has it been enhanced to ₹5,000/-?

No, the bonus salary ceiling limit is still Rs. 3,500 per month. If we calculate the bonus as per the ceiling salary, then in case of 8.33% (minimum bonus to be paid), it amounts to Rs. 3499, and for 20% (maximum bonus that can be paid), it amounts to Rs. 8400 only.

You can find more details by using the search option available at the top of this page. Furthermore, if you are not satisfied, you can check the sidebar on the right side where you can find the relevant threads that were discussed earlier.

There has been no change in the ceiling for the payment of Statutory Bonus. It continues to be ₹3,500/-.

Concerns About Bonus Act Ceiling Limit

This is strange. When salary levels have increased multifold, the Bonus Act still talks of only Rs. 3500/- as the ceiling limit. This is just unacceptable from everybody's view. Why trade unions are keeping silent on this is not understood.

The ceiling limit on salary for bonus eligibility is not Rs. 3,500, but Rs. 10,000. However, for bonus calculation, salaries up to Rs. 3,500 will be taken into account.

Regards,
Abbas.P.S

Statutory Bonus is mainly concerned with the workmen category who come under the Contract Labour Act or Minimum Wages Act. Please do not compare your salary for Bonus. The salary of minimum wage workmen is comparatively low, and ₹3,500/- is a good amount for them. Earlier, the Bonus was applicable to employees whose basic was ₹3,500/-; however, it has been enhanced to ₹10,000/- in the year 2007 to cover more employees (even though the ceiling limit is ₹3,500/-).

Thank you.

Computation of bonus should be worked out as per Schedule I to IV of the Act. Every person drawing a salary between ₹3,500 and ₹10,000 per month should have their bonus calculated as if their salary were ₹3,500 per month. To date, there has not been any enhancement to ₹5,000 per month.

Thanks & Regards,
V K Sharma
HR, Tarapur

Opinion on the Payment of Bonus Act Amendment

My opinion after going through this conversation is that the Payment of Bonus Act, after amendment, now covers a larger number of employees. This is a good thing for us. Before the amendment, we only calculated based on a salary limit of Rs. 2500, whereas now the limit is Rs. 3500.

With regards,
Madhuresh

Yes, it is a good thing. The only issue is that the lowest ceiling limit should be around 5000, or it should be 8.33% of basic + DA.

Kindly guide me on this. My salary details are as follows:

- Basic: 7000
- DA: 2500
- HRA: 3250
- CA: 2000
- Medical Allowance: 500
- Canteen Allowance: 250
- Total: 15500

So, am I not eligible for a bonus?

An employee is eligible to receive a bonus only when they have worked for 30 working days in that year and are drawing wages up to ₹10,000 per month or less. Wages mean Basic + DA.

In your case, you are drawing ₹9,500 (Basic + DA) wage per month. Therefore, you are eligible for the bonus.

I have also enclosed an Excel sheet to determine eligibility for a bonus based on monthly salary.

Regards.

Dear all, please guide me: If an employee has a (basic+DA) of Rs. 3700, should the bonus be calculated on Rs. 3500 or Rs. 3700?

Regards, Ajay

As already clarified by the members, the bonus is to be calculated considering the salary as Rs. 3500/- per month.

Regards,
R N KHOLA

Dear Mehulchavda121,

According to the Bonus Act, the bonus salary limit is 21000. After reaching this threshold, employees cannot force their employer.

Thanks,
Khirod Kumar