Definition of Salary or Wage Under PB Act
As per the PB Act, the definition of "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. It 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 to;
(ii) the value of any house accommodation or supply of light, water, medical attendance, or other amenity or of any service or of 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.
Explanation: Where an employee is given, in lieu of the whole or part of the salary or wage payable to him, free food allowance or free food by his employer, such food allowance or the value of such food shall, for the purpose of this clause, be deemed to form part of the salary or wage of such employee.
Bonus Eligibility Based on Salary Definition
As per the above definition, the salary for bonus eligibility will be based on Basic & DA. Therefore, it is not the monthly gross salary.
Moreover, the bonus is considered deferred wages, i.e., in 2021, the bonus will be paid for 2020, depending on the accounting year of the organization. Accordingly, the Basic & DA amount to be considered is for 2020, not for the payable year 2021.
Regards,
S K Bandyopadhyay (WB, Howrah)
CEO-USD HR Solutions
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