Understanding Anniversary Appraisals and Bonus Calculations: When and How Do They Apply?

Anniversary and Annual Appraisal Clarification

Could you provide some clarity on anniversary and annual appraisal?

Anniversary Appraisal

For anniversary appraisal, when is the revision applicable from?

Bonus Calculation

How do you calculate the bonus? What percentage of CTC (or is it a percentage of basic)? Is it compulsory to provide a bonus for all designations?

Regards

Bonuses are always calculated based on the basic salary only. Those whose basic salary is $10,000 or below are all eligible for a bonus.

Bonus is calculated based on the basic wages. The percentage is 8.33%, or generally, there will be one month's basic wages. Bonuses are paid to everyone, regardless of their designation, who is drawing a salary below 10,000/-.

Annual Appraisals

Annual appraisals have many processes such as self-appraisal, 180-degree appraisal, 360-degree appraisal, etc. You should follow any one of those formats.

Please find the enclosed attachment for performance appraisals in traditional, 180-degree, and 360-degree formats.

Thank you.

Bonus Calculation Process

Could you please confirm the Bonus Calculation process for me?

Total Basic of 12 months (Financial year) * 8.33% * 12

Please let me know if I am incorrect.

Regards,
DS

This is not the correct way to calculate the bonus. Bonus calculation is generally based on available surplus, allocable surplus, gross profit, and set on and set off. First, read the Bonus Act; you will get a clear idea about these terminologies and the bonus calculation process. If you are not able to understand it, write to me, and I will provide you with a detailed sheet.

Regards,
Meenakshi

Bonus depends on surplus or gross profit for just the starting five years. At the beginning stage of a company, it is considerable. If a company earns a profit, they will pay a bonus to their employees for the first five years only. From the 6th year, it becomes a liability. The company has to pay a bonus.

Factors to be Judged for Bonus:

- Basic up to Rs.10,000/-
- Minimum working period: 30 days for the last financial year
- Percentage: 8.33% to 20% on Basic.
- Earned basic x percentage = Bonus

Am I correct? Please give your advice also.

Regards,
Manas Roy Chowdhury

Bonus as Part of Statutory Compliance

Bonus is a part of statutory compliance and has no relation to performance appraisal results. Bonuses must be paid before the end of the first six months of the next financial year for those employees who are receiving Rs.10K or less but up to Rs.3500. The bonus amount is calculated as Earned Basic x Percentage, ranging from Rs.292 to Rs.700, at a rate of minimum 8.33% and maximum up to 20%, subject to the Profit and Loss situation in your sixth Balance Sheet. This exemption is applicable for five years only, and employees must have worked for a minimum of 30 days or have an amount due to them of more than Rs.100 during the financial year. Incentives paid by the company, other than the statutory amount, may be linked to your performance appraisal systems or results.

Regards