How Much Bonus Do Companies Really Pay During Diwali? Seeking HR Insights from India

Hi Everyone. I am the HR Manager from Malaysia and in charge of HR management in one of the companies located in Mumbai. I need some clarification on the Bonus Act. Our company pays 8.33% (as per the Bonus Act) bonus during the Diwali festival and a 20% performance bonus after the financial year, which ends in March every year. Recently, our employees have been requesting an increase in the 8.33% bonus, mentioning that other companies are paying more than 8.33%. I am conducting a survey on this and hope to receive feedback from HR professionals in India about the percentage paid by other companies.

Thanks in advance.

Regards,
Vijay

Questions for Clarification

1) What is the salary? Is it below ₹10,000?

2) Is your company in India less than 5 years old, or has it completed 5 years?

3) Is your company making a profit (PAT)?

4) Are you allocating surplus in the account books?

Based on the answers, clarity can be provided.

Generally, the bonus in India is paid as per the Bonus Act (please research on Google), which is a minimum of 8.33% of the basic salary (calculated on a maximum basic of ₹6,500 per month). The maximum can be 20%.

Performance bonus is a completely different component and should not be mixed with this bonus.

Regards,

Hi Vinod, Thanks for your reply. I really appreciate that. Yes, it is a manufacturing company based in Mumbai, India, focusing on profit and allocating surplus in accounts.

Diwali Bonus and Employee Concerns

Our company pays an 8.33% bonus during the Diwali festival and another incentive bonus of up to 20% in March. Are we considered a better company compared to others because our employees are asking for an increase in the Diwali bonus (more than 8.33%)?

I hope this helps clarify any confusion. Let me know if you have any further questions.

Regards,