THE PAYMENT OF BONUS AMENDMENT - CLARIFICATION REQUIRED

JOSEPHPATRAO
HI,

IT WOULD BE APPRECIATED IF WE COULD GET THE CLARIFICATION ON THE PAYMENT OF BONUS AMENDMENT. 1) IF AN EMPLOYEE'S BASIC IS RS. 10000/- THEN HOW MUCH WE NEED TO PAY - EITHER WE HAVE TO PAY 8.33% ON CIELING LIMIT ( 3500) OR 8.33% ON BASIC SALARY ( 10.000)? AS PER THE MINISTRY OF LABOUR & EMPLOYMENT NEW DELHI, KARTIKA 07, 1929/OCTOBER 29, 2007 VBA:NR:LK:29/10/07

Monday, October 29, 2007 Ministry of Labour & Employment PRESS NOTE

19:10 IST On 27th October, 2007 the President has promulgated the Payment of Bonus (Amendment) ordinance, 2007 containing the following amendments:- i) Amendment to clause (13) of Section 2 of the Payment of Bonus Act, 1965 to raise the eligibility limit for payment of bonus from the salary or wage of Rs. 3500/- per month to Rs. 10000/- per month. ii) Amendment to section 12 of the Payment of Bonus Act, 1965 to raise the ceiling for calculation purpose from the salary or wage of Rs. 2500/- per month to Rs. 3500/- per month; iii) Deletion of clause (vi) of section 32 of the Payment of Bonus Act, 1965 so as to cover the employees employed through contractors on building operations. Thus the employees, including those employed through contractors on building operations will be entitled to receive bonus as per the revised ceilings, for the year 2006-07 and onwards. The Ordinance shall be deemed to have come into force on 1st April, 2006. Ministry of Labour & Employment New Delhi, Kartika 07, 1929/October 29, 2007 VBA:NR:LK:29/10/07

REGARDS

JOSEPH
Patrick Meinrad
An Employee whose eligible salary/wages exceeds Rs.10,000, he/she is to be paid bonus but the calculation of 8.33% should be done on Rs.3,500/- as it has been clearly explained in section 12 of The Payment of Bonus Act, 1965
V.S.JANARDHANAN
As per the payment of bonus act if a person is receiving a salary over and above Ras 3500 pm, for the purpose of computing bonus Rs 3500 will be considered as his salary and accordingly the bonus percentage will be worked out.
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