can u pleaze give me the criteria that i should follow to give end of year bonus:)
From Lebanon, Beirut
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3From Lebanon, Beirut
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Hi , Minimum bonus has to be given 8.33%of you basic salary.Rest is upto the employeer,how much he wants to give.It can be based on %age of net profit...soon and so fourt. Thanx N Regards Promial
From India, Delhi
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From India, Delhi
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Hi,
If I may add to what Promila said...
I assume (as is often the case) that you are referring to bonuses paid based on the profits made by the organization.
As per the Bonus Act, a minimum of 8.33% of the basic salary has to be paid as a bonus and is subject to a maximum of 20%.
When you calculate the bonus, you should consider the allocable surplus and available surplus because the bonus is paid as a reward for performance.
Allocable surplus is the gross profits minus the tax, depreciation, development allowance, etc.
Available surplus is:
- 67% of allocable surplus for companies that haven't made provisions for tax under the I-T Act.
- 60% of allocable surplus for others.
Now, if your available surplus allows you to pay more than 8.33% as a bonus, you should accordingly pay more.
If your available surplus is less than what you need for 8.33%, you still have to pay 8.33% of the basic salary, but this can be carried forward for the next year and up to four years.
If the available surplus is more than what you need to pay 20% as a bonus, then the remaining surplus is carried forward to the next year and so forth for four years.
If I have said anything wrong, please correct it and add anything I may have missed out.
Regards,
Shweta Challa
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If I may add to what Promila said...
I assume (as is often the case) that you are referring to bonuses paid based on the profits made by the organization.
As per the Bonus Act, a minimum of 8.33% of the basic salary has to be paid as a bonus and is subject to a maximum of 20%.
When you calculate the bonus, you should consider the allocable surplus and available surplus because the bonus is paid as a reward for performance.
Allocable surplus is the gross profits minus the tax, depreciation, development allowance, etc.
Available surplus is:
- 67% of allocable surplus for companies that haven't made provisions for tax under the I-T Act.
- 60% of allocable surplus for others.
Now, if your available surplus allows you to pay more than 8.33% as a bonus, you should accordingly pay more.
If your available surplus is less than what you need for 8.33%, you still have to pay 8.33% of the basic salary, but this can be carried forward for the next year and up to four years.
If the available surplus is more than what you need to pay 20% as a bonus, then the remaining surplus is carried forward to the next year and so forth for four years.
If I have said anything wrong, please correct it and add anything I may have missed out.
Regards,
Shweta Challa
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