I am working in a group of companies in Kolkata and have some confusion regarding the calculation of Bonus and Ex-gratia.
As of now, I have understood that an employee whose salary (BA+DA) is ₹10,000 or less is eligible for a bonus. However, while calculating the bonus, his BA+DA will be considered as ₹3,500 because, as per the amended Bonus Act, the new limit for payment of bonus is ₹10,000 and the new ceiling for calculation is ₹3,500.
Example 1:
If an employee's gross salary is ₹15,000 where BA (45%) + DA (35%) is ₹8,100, he will get a bonus of ₹3,500*12*8.33% = ₹3,499. For the remaining part of the salary, which is (₹8,100-₹3,500) = ₹4,600, he will receive ex-gratia, equivalent to 1 month's BA+DA.
Example 2:
If an employee's gross salary is ₹18,600 where BA+DA is ₹10,044, he will not receive any bonus but only ex-gratia, which is 1 month's BA+DA.
Questions:
1. Are the above two examples correct?
2. Is my understanding correct for the calculation of the bonus?
3. Is there a specific minimum or maximum limit of the percentage for ex-gratia?
4. Is my understanding correct as per the new amendment of the Bonus Act?
Please help with your valuable advice.
From India, Calcutta
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2As of now, I have understood that an employee whose salary (BA+DA) is ₹10,000 or less is eligible for a bonus. However, while calculating the bonus, his BA+DA will be considered as ₹3,500 because, as per the amended Bonus Act, the new limit for payment of bonus is ₹10,000 and the new ceiling for calculation is ₹3,500.
Example 1:
If an employee's gross salary is ₹15,000 where BA (45%) + DA (35%) is ₹8,100, he will get a bonus of ₹3,500*12*8.33% = ₹3,499. For the remaining part of the salary, which is (₹8,100-₹3,500) = ₹4,600, he will receive ex-gratia, equivalent to 1 month's BA+DA.
Example 2:
If an employee's gross salary is ₹18,600 where BA+DA is ₹10,044, he will not receive any bonus but only ex-gratia, which is 1 month's BA+DA.
Questions:
1. Are the above two examples correct?
2. Is my understanding correct for the calculation of the bonus?
3. Is there a specific minimum or maximum limit of the percentage for ex-gratia?
4. Is my understanding correct as per the new amendment of the Bonus Act?
Please help with your valuable advice.
From India, Calcutta
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If a employee works for 20days and getting basic salary of those working days is 2500 then how to calculate bonus for him?
From India, Madras
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From India, Madras
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Dear Sarya, you are absolutely correct in both examples. For your clarification, please note that Ex-gratia is not a statutory liability of an employer but merely a term of service stipulated in the contract of employment.
Regards,
Mangesh Wakodkar
Aurangabad
From India, Pune
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Regards,
Mangesh Wakodkar
Aurangabad
From India, Pune
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Bonus Calculation on Actual Earnings
If the total earnings of B+DA are less than $3,500.00 in any particular month, the bonus will be calculated on the actual amount earned (B+DA). A minimum of 30 days of working is the eligibility criteria for the payment of the bonus.
From India
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If the total earnings of B+DA are less than $3,500.00 in any particular month, the bonus will be calculated on the actual amount earned (B+DA). A minimum of 30 days of working is the eligibility criteria for the payment of the bonus.
From India
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Amendment to Payment of Bonus Act 2015.jpg
Bonus act amendment gazette copy.pdf