Dear seniors, One of my production employees is demanding an 11% bonus on his gross salary for the period 2009-10. His gross salary is Rs. 14,500/-. However, management does not agree to pay him at this rate. Management is saying to pay him only Rs. 3,500/-. The employee is claiming that there have been changes in the criteria for bonus payment, which I am aware of as well. However, management is not in agreement.
Now, what should I do?
Waiting for your reply.
Regards,
KSCC
From India, New Delhi
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Now, what should I do?
Waiting for your reply.
Regards,
KSCC
From India, New Delhi
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Dear KSCC, Management is right in this regard. The minimum bonus is still 8.33%. Salary for bonus coverage continues as Rs. 10,000 and for bonus calculation as Rs. 3,500. Abbas.P.S
From India, Bangalore
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dear abbas, pls go through the attachment and make it clear please. regards kscc
From India, New Delhi
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From India, New Delhi
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Dear KSCC/Abbas, According to the file attached, Salary for bonus coverage continues as Rs. 10,000 but the minimum bonus has been increased to 11% from 8.33%.
From India, Gurgaon
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From India, Gurgaon
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Dear KSCC & Ashutosh, It is only a proposal but hasn't been enacted. Kindly note the terms used "Be it enacted in Parliament.........", which means it is not enacted. As per the existing Bonus Act, the minimum is still 8.33%, the salary for coverage is Rs. 10,000, and the salary for calculation is Rs. 3,500.
Abbas.P.S
From India, Bangalore
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Abbas.P.S
From India, Bangalore
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Yes new bill is not yet approved , it is just draft praposal so 3500 maximum bonus is correct
From India, Pune
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From India, Pune
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Bonus Payment Guidelines
1. The bonus payable is on the basic salary and not on the gross salary.
2. If the basic salary is not separated from the gross salary, then you have to take the gross salary for the computation of the bonus.
3. The percentage of bonus payable continues to be 8.33% only, and no amendment has taken place yet.
4. The maximum salary limit for bonus eligibility is Rs. 10,000.
5. If you are considering a salary of Rs. 14,500 as the bonusable salary (i.e., gross salary), the employee is not eligible for a bonus.
6. If you have separated the basic salary and it is Rs. 10,000 or below, you can pay a bonus at 8.33%.
7. Nobody can either deny or refuse to pay the bonus as this is statutory. So just follow the above guidelines as per the Bonus Act and comply.
Hope the matter is clear.
Regards,
K. Ramachandra
Bangalore
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1. The bonus payable is on the basic salary and not on the gross salary.
2. If the basic salary is not separated from the gross salary, then you have to take the gross salary for the computation of the bonus.
3. The percentage of bonus payable continues to be 8.33% only, and no amendment has taken place yet.
4. The maximum salary limit for bonus eligibility is Rs. 10,000.
5. If you are considering a salary of Rs. 14,500 as the bonusable salary (i.e., gross salary), the employee is not eligible for a bonus.
6. If you have separated the basic salary and it is Rs. 10,000 or below, you can pay a bonus at 8.33%.
7. Nobody can either deny or refuse to pay the bonus as this is statutory. So just follow the above guidelines as per the Bonus Act and comply.
Hope the matter is clear.
Regards,
K. Ramachandra
Bangalore
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Amendment to the Bonus Act
The new amendment of the Bonus Act is expected to be effective from mid-January 2011 to the end of February 2011. Please continue paying bonuses at the existing rates. The effective date for these changes would be from 01.04.2010 to 31.03.2011 (most probably).
Hope that this winter session of Parliament will have room for the Bonus amendment as it is already overburdened with scams!!
Regards,
Pratik Vaidya
Karma Management Consultants
From India, Mumbai
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The new amendment of the Bonus Act is expected to be effective from mid-January 2011 to the end of February 2011. Please continue paying bonuses at the existing rates. The effective date for these changes would be from 01.04.2010 to 31.03.2011 (most probably).
Hope that this winter session of Parliament will have room for the Bonus amendment as it is already overburdened with scams!!
Regards,
Pratik Vaidya
Karma Management Consultants
From India, Mumbai
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Dear KSCC yes i too agree with Mr. Abbas. As per the act we have to calculate on Rs. 3500/- only VENKAR HR Manager
From India, Hyderabad
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From India, Hyderabad
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It was only proposed not to implement now. The industry will pay after receiving the Gazette Notification, which has not been issued by the government. So, you have to pay as per the old rate.
Regards,
Asif
From India, Calcutta
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Regards,
Asif
From India, Calcutta
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only the bill has been passed for amendment the parliament has to still approve it, amendment has not been done yet in the bonus act, it is still 8.33% not 11 % yet
From India, Bhopal
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From India, Bhopal
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I would like to understand the applicability of this act. Do we have to pay this statutory bonus in this financial year, and secondly, until when do we need to pay this bonus?
Also, we have a performance bonus payable in March 2011. Can we adjust this amount against that bonus?
Regards,
Manasi
From Canada, Markham
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Also, we have a performance bonus payable in March 2011. Can we adjust this amount against that bonus?
Regards,
Manasi
From Canada, Markham
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Bonus Payment Guidelines
The new amendment has not yet been received. So, continue with 8.33% of the basic salary. The salary limit for bonus payment is Rs. 10,000. If an employee is withdrawing a salary of more than Rs. 10,000, then the final decision is up to management whether to give them a bonus or not.
Thank you.
From India, Bangalore
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The new amendment has not yet been received. So, continue with 8.33% of the basic salary. The salary limit for bonus payment is Rs. 10,000. If an employee is withdrawing a salary of more than Rs. 10,000, then the final decision is up to management whether to give them a bonus or not.
Thank you.
From India, Bangalore
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Bonus Payment Clarification
Bonus is payable for the financial year April to March. For example, the bonus payable now is for the period April 2009 to March 2010. This needs to be announced/paid by 30th November 2010. Performance Bonus cannot be linked with Bonus - Bonus is statutory and payable to all eligible employees. Performance bonus is up to the companies whether to pay or not.
Regards,
K. Ramachandra
Dear Mr. Prakash Singh, Thanks for your reply and noting the points.
Regards,
K. Ramachandra
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Bonus is payable for the financial year April to March. For example, the bonus payable now is for the period April 2009 to March 2010. This needs to be announced/paid by 30th November 2010. Performance Bonus cannot be linked with Bonus - Bonus is statutory and payable to all eligible employees. Performance bonus is up to the companies whether to pay or not.
Regards,
K. Ramachandra
Dear Mr. Prakash Singh, Thanks for your reply and noting the points.
Regards,
K. Ramachandra
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Now Bonus is to becomputed on the wages ceiling of Rs. 5000/-which is ammended in the month of 27 oct 2007 Regards, Basanta
From India, Calcutta
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From India, Calcutta
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There is no question of paying 11% bonus, since draft of amendement is yet to get converted in to law. Ravi
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Dear Basanta, The bonus ceiling is Rs. 3500/- (i.e., the amount of bonus payable at 8.33%). The eligibility ceiling is Rs. 10000/-. There is no amendment for the wages ceiling to be Rs. 5000/-. Can you please clarify and send us the amendment that you speak of, which happened on 27th October 2007?
Regards,
K. Ramachandra
Bangalore
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Regards,
K. Ramachandra
Bangalore
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Understanding Bonus Demands
First and foremost, please understand that no employee can demand a bonus at a rate they think is proper. The amount of the bonus to be disbursed is based on the company's performance and the funds allocated for the purpose. It is accordingly declared by the management after the completion of the balance sheet and finalization of accounts. There is no provision in the Payment of Bonus Act that mandates the payment of an 11% bonus.
Cheers!!! Vasant Nair
From India, Mumbai
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First and foremost, please understand that no employee can demand a bonus at a rate they think is proper. The amount of the bonus to be disbursed is based on the company's performance and the funds allocated for the purpose. It is accordingly declared by the management after the completion of the balance sheet and finalization of accounts. There is no provision in the Payment of Bonus Act that mandates the payment of an 11% bonus.
Cheers!!! Vasant Nair
From India, Mumbai
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The bonus wage ceiling is Rs. 10,000/- and not Rs. 5,000/-. Can you please clarify which amendment you are referring to and provide the gazette notification or circular for everyone's information.
Regards,
K. Ramachandra
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Regards,
K. Ramachandra
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Payment of Bonus: Employee Demands vs. Management Decisions
The demand for payment of a bonus and the sum to be paid, as decided by the employee, is not a matter of the employee's right. Payment of a bonus is determined and declared by the management every year and is paid in accordance with the Payment of Bonus Act. In this case, the employee's demand is baseless, and he should be informed that the same cannot be entertained.
From India, Mumbai
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The demand for payment of a bonus and the sum to be paid, as decided by the employee, is not a matter of the employee's right. Payment of a bonus is determined and declared by the management every year and is paid in accordance with the Payment of Bonus Act. In this case, the employee's demand is baseless, and he should be informed that the same cannot be entertained.
From India, Mumbai
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Worker drawing a salary/wages of Rs. 10,000 per month as the highest ceiling is eligible to receive a bonus. However, the calculating ceiling is Rs. 3,500 per month. Those who draw a salary/wages above Rs. 10,000 per month are not entitled to a bonus according to the provisions of the Payment of Bonus (as amended) Act, 1965.
The minimum bonus rate is 8.33%, while the maximum bonus rate is 20%. The maximum bonus amount is Rs. 8,300.
From India, Kolkata
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The minimum bonus rate is 8.33%, while the maximum bonus rate is 20%. The maximum bonus amount is Rs. 8,300.
From India, Kolkata
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Payment of Bonus Act Amendment.pdf