Clarification on Bonus Act Amendment of 2007
As per the Bonus Act amendment of 2007, which is the latest guideline for the payment of bonuses, I require some clarification:
- Are all employees whose salary is less than or equal to Rs 10,000/- per month eligible for a bonus?
- However, the maximum bonus payable is calculated at Rs 3,500/- per month.
- If the basic + DA is Rs 4,000/-, what will be applicable?
- If our company has decided to pay a 10% bonus this year, could someone demonstrate an example?
I am not clear on what Rs 10,000/- and Rs 3,500/- exactly mean in the act. Please see the attached Official Gazette on this.
Requesting seniors' help in clarifying the Bonus Act concept.
Regards,
Vicky
From India, Hyderabad
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As per the Bonus Act amendment of 2007, which is the latest guideline for the payment of bonuses, I require some clarification:
- Are all employees whose salary is less than or equal to Rs 10,000/- per month eligible for a bonus?
- However, the maximum bonus payable is calculated at Rs 3,500/- per month.
- If the basic + DA is Rs 4,000/-, what will be applicable?
- If our company has decided to pay a 10% bonus this year, could someone demonstrate an example?
I am not clear on what Rs 10,000/- and Rs 3,500/- exactly mean in the act. Please see the attached Official Gazette on this.
Requesting seniors' help in clarifying the Bonus Act concept.
Regards,
Vicky
From India, Hyderabad
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Before 2007, the salary limit for eligibility for bonus payment was ₹3,500, but after the amendment, this limit was raised to ₹10,000.
Before the amendment, for calculation purposes, ₹2,500 was considered as the basis, but after the amendment, this limit was raised to ₹3,500.
I hope you got your answer.
Regards,
Yogesh Kumar Gupta
From India, New Delhi
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Before the amendment, for calculation purposes, ₹2,500 was considered as the basis, but after the amendment, this limit was raised to ₹3,500.
I hope you got your answer.
Regards,
Yogesh Kumar Gupta
From India, New Delhi
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a) Yes, all employees whose salary is equal to or below Rs. 10,000 per month will be eligible for a bonus, subject to a minimum attendance of 30 days in the corresponding accounting year.
b) The maximum salary for bonus calculation will be Rs. 3,500. Accordingly, the maximum bonus will be 3,500 x 12 x 20% = Rs. 8,400.
c) Even if the basic + DA is Rs. 4,000, only Rs. 3,500 will be taken into account for bonus calculation.
d) If the bonus is 10% and the salary to calculate the bonus is Rs. 3,500, then the calculation will be as follows: 3,500 x 12 x 10% = Rs. 4,200. This amount, Rs. 4,200, is for full-year attendance. If the attendance is 8 months out of 12 months, then the bonus entitled will be 4,200 x 8/12 = Rs. 2,800.
Regards,
Abbas.P.S
From India, Bangalore
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530b) The maximum salary for bonus calculation will be Rs. 3,500. Accordingly, the maximum bonus will be 3,500 x 12 x 20% = Rs. 8,400.
c) Even if the basic + DA is Rs. 4,000, only Rs. 3,500 will be taken into account for bonus calculation.
d) If the bonus is 10% and the salary to calculate the bonus is Rs. 3,500, then the calculation will be as follows: 3,500 x 12 x 10% = Rs. 4,200. This amount, Rs. 4,200, is for full-year attendance. If the attendance is 8 months out of 12 months, then the bonus entitled will be 4,200 x 8/12 = Rs. 2,800.
Regards,
Abbas.P.S
From India, Bangalore
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Amendment to Payment of Bonus Act 2015.jpg
Payment-of-Bonu s-Act-2007-Noti fication.pdf