Dear Learned members,
Definitions of Wages Under the Bonus Act
Under the Bonus Act, there are two definitions of wages:
(i) Wages for eligibility criteria (Bonus wages ceiling) and (ii) Wages for calculation of Bonus for eligible employees. In the first case (while checking the eligibility criteria), the total wages are countable (which should not exceed Rs. 21,000). Please see the below abstract of the Bonus Act:
"Salary or wage" means all remuneration (other than remuneration in respect of overtime work) capable of being expressed in terms of money, which would, if the terms of employment, express or implied, were fulfilled, be payable to an employee in respect of his employment or of work done in such employment and includes dearness allowance (that is to say, all cash payments, by whatever name called, paid to an employee on account of a rise in the cost of living), but does not include:
(i) any other allowance which the employee is for the time being entitled; (ii) the value of any house accommodation or supply of light, water, medical attendance, any other amenity, any service, any concessional supply of food grains, or other articles; (iii) any traveling concession; (iv) any bonus (including incentive, production, and attendance bonus); (v) any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the employee under any law for the time being in force; (vi) any retrenchment compensation or any gratuity or other retirement benefit payable to the employee or any ex gratia payment made to him; (vii) any commission payable to the employee.
Calculation of Bonus Wages
In the second case (while calculating Bonus), wages mean Basic+DA. It should be 8.33% of the earned Basic+DA for the year or Rs. 7,000, whichever is higher. Senior members can shed more light on the matter.