Bonus Calculation Dilemma: How to Categorize Supervisors with Lower Salaries Than Juniors?

Need help with bonus calculation. If a few employees at the supervisor level have a lower basic salary than their juniors, in which category should they be placed for bonus calculation? Skilled/unskilled.

Supervisors are in the skilled or highly skilled category. Their salary level is not necessarily connected to their skills. In some cases, the salary of junior employees may surpass that of supervisors due to factors such as experience and age.

For bonus calculation purposes
Supervisors should be considered at least at the skilled level of minimum wages.

Regards, S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions

Hi, it all depends on the seniority of the employee in the organization and other factors.

Bonus is paid as per the agreed calculation formula, as a percentage of Basic Wages plus DA, computed annually. For supervisors and others, the same percentage and formula could be used as applicable to the workers. This will help in maintaining uniformity and will blunt any criticism of favoritism.

I think the question is all about the basis of "Rs 7000 or the minimum wages fixed, whichever is higher." If so, you can find the wages as per the Minimum Wages notification applicable to supervisors and even managers in it. You can take it. Obviously, if the basic + DA (or the bonus qualifying salary) of all exceeds Rs 7000, you can base your calculation of the bonus on the basis of the minimum wages notification.

Dear Nisha, If you are referring to the Statutory Bonus, the criteria will be governed by the provisions of the Payment of Bonus Act, 1965. Accordingly, an employee who was employed for a minimum of 30 days in the corresponding accounting year and draws wages less than Rs. 21,000/- is eligible for a Bonus. The Bonus will be a minimum of 8.33% of the wages earned by him during the accounting year. If he is governed by minimum wages, it will be the minimum wage or Rs. 7000/-, whichever is higher.

If you are referring to any other type of Bonus, such as Performance Bonus or Incentive Bonus, then the same would be governed by your organization's wage and compensation policy.

Regards,

Shailesh Parikh [Phone Number Removed For Privacy-Reasons] Vadodara, Gujarat