Confused About Bonus Calculation for Absent Employees? Need Your Expert Advice!

Dear All, requesting you to please revert with your expert views on the query below.

Bonus Calculation Query

The employee is entitled to a bonus as per the Bonus Act and is drawing a bonus wage of Rs. 10,000/- per month. In case he is absent for two days, he will receive a bonus wage of 10000/30*28 = Rs. 9,333/-, which is above Rs. 7,000/-.

Calculation Methods

Now, for bonus calculation for that month, it will be:

- 7000 * 20% = Rs. 1,400/-
or
- 7000/30 * 28 = 6533 * 20% = Rs. 1,307/-

Please advise on which calculation is correct, and if you have any Supreme Court case laws, please refer to them.

Thank you in advance!

Bonus is payable on actual earnings. In the present case, the employee's basic is Rs 10,000/-. Bonus is payable on Rs 7,000 or minimum wages, whichever is higher. Find out the minimum wages applicable for the relevant year. If the minimum wages are more than Rs 7,000/-, calculate bonus on actual minimum wages. If the minimum wages are less than Rs 7,000/-, calculate bonus on Rs 7,000/-. The calculation should be based on actual earnings.

Thank you, Mr. Srinath. Can you provide advice on the calculation specific to my query.

Dear sir,

I am Haragopal. I have a small doubt. Is the bonus calculated at 8.33% or 20%? Please provide me with clarification.

Thank you, sir.

Regards,
Haragopal
Contact: 8520032500

First, you have to generate Bonus Register Form-A & B. Based on the information, the percentage of Bonus payable for the respective accounting year is decided not on hypothetical figures but on actual figures.

Loss-making units as per the Balance sheet are liable to pay a Minimum Bonus at 8.33%. For profit-making units, the payment of Bonus is limited to a maximum of 20%.

Dear Mr. Amit,

If wages are 10,000 and he has leave without pay for 2 days, the earned wages for the month will be 10,000/26*24 = 9,231. Now for bonus calculation, it is as follows:

(a) Suppose the minimum wage is Rs. 6,855, then the bonus will be on Rs. 7,000. So it will be 7,000 * Bonus percentage.

(b) Suppose the minimum wage is Rs. 8,025, then the bonus will be on Rs. 8,025. So it will be 8,025 * Bonus percentage.

In case he has leave without pay for 9 days, the earned wages for the month will be 10,000/26*17 = 6,539. In this case, the bonus calculation will be as follows:

(c) Suppose the minimum wage is Rs. 6,855, then the bonus will be on Rs. 7,000 or earned wages, whichever is lower. So it will be 6,539 * Bonus percentage.

(d) Suppose the minimum wage is Rs. 8,025, then the bonus will be on Rs. 8,025 or earned wages, whichever is lower. So it will be 6,539 * Bonus percentage.

The formula in Excel will be something like this: MIN(EarnedWages, MAX(7000, MinimumWages))