Seeking Advice on Salary Bifurcation and Monthly Bonus Compliance in India

Salary Bifurcation and Monthly Statutory Bonus Payment

I am working as an HR person in a Delhi-based company. I would like to gather your valuable ideas on salary bifurcation and monthly statutory bonus payments. Our existing salary calculations are as follows:

Employee Name--Basic---HRA---Conveyance Allowance--Medical Allowance--Others Allowance--Gross Salary---EPF---ESIC----Net Salary
Vinod Kumar----14806---00--------00------------------00-------------00-------------14806/--------1777---112------12917/- (Based on Unskilled Minimum Wages)
Gurpreet Kaur----15000----00------00------------------00-------------2924---------17924/---------1800---135-----15989/- (Based on Skilled Minimum Wages)
Devesh Ch--------23200---11600---1600---------------1250-----------17566--------55216/---------2784---00------52432/-

Please suggest if our bifurcation is compliant with the minimum wage act and PF calculation. I am aware that minimum wages consider the gross salary, not only the basic salary; however, this is still uncertain to me. Could you please advise? Additionally, can we pay the bonus as per the bonus act on a monthly basis within the salary? I would appreciate your guidance on the correct approach for this. Your valuable suggestions on my query would be greatly appreciated. Please help me out.

Thanks,
Devesh Kumar
Location: Mathura, India

[B]Salary Bifurcation and Statutory Bonus Calculation in India

✦ Salary Bifurcation Compliance:
- The Ministry of Labour and Employment in India mandates that the basic wage should constitute at least 50-60% of the total salary, with the remaining portion allocated to allowances. Ensure compliance with the Minimum Wages Act, which considers the gross salary for wage calculation, not just the basic salary.

✦ PF Calculation:
- The Employees' Provident Fund (EPF) contribution is calculated as a percentage of the basic wage plus dearness allowance. The EPF contribution rate is currently 12% for both employers and employees. Verify the accuracy of EPF deductions based on the prescribed rates.

✦ Statutory Bonus Payment:
- The Payment of Bonus Act in India mandates an annual bonus payable to eligible employees. Bonus calculation is based on the allocable surplus and set at a minimum of 8.33% of the annual salary. While monthly bonus payments are not common practice, you can consider structuring an incentive scheme or performance-based rewards within the salary structure.

✦ Recommendations:
1. Review the salary bifurcation to ensure compliance with labor laws and minimum wage regulations.
2. Double-check the EPF deductions to align with the statutory requirements.
3. Consider annual bonus payouts in adherence to the Bonus Act guidelines.
4. Explore alternative performance-based bonus structures in alignment with monthly salary payments.

For specific guidance on statutory regulations, refer to the Minimum Wages Act, the Payment of Bonus Act, and the EPF rules to ensure accurate salary bifurcation and statutory bonus calculations.