Dear Seniors,
I have a few queries as follows:
CASE 1: According to the Bonus Act, it can be well derived that if any employee who earns below a salary of Rs 10,000/- is eligible for a bonus.
Q. Does the term "salary below Rs 10,000/-" refer to an employee's total monthly salary? If yes, will the calculation be based on the BASIC salary head? Or does the term refer to an employee's monthly Basic salary head?
Q. Another question that I vaguely understand is - in the calculation part, will Rs 3,500/- be taken into account if the basic salary is less than Rs 3,500? What will be the calculation if the basic salary is above Rs 3,500?
Q. Which institutions are exempted from the payment of a bonus? I have heard that hospitals, social welfare institutions, chambers of commerce, the Indian Red Cross Society, or other institutions of a similar nature, universities, and educational institutions are exempted from the payment of a bonus.
Thank you.
From India, Bangalore
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1I have a few queries as follows:
CASE 1: According to the Bonus Act, it can be well derived that if any employee who earns below a salary of Rs 10,000/- is eligible for a bonus.
Q. Does the term "salary below Rs 10,000/-" refer to an employee's total monthly salary? If yes, will the calculation be based on the BASIC salary head? Or does the term refer to an employee's monthly Basic salary head?
Q. Another question that I vaguely understand is - in the calculation part, will Rs 3,500/- be taken into account if the basic salary is less than Rs 3,500? What will be the calculation if the basic salary is above Rs 3,500?
Q. Which institutions are exempted from the payment of a bonus? I have heard that hospitals, social welfare institutions, chambers of commerce, the Indian Red Cross Society, or other institutions of a similar nature, universities, and educational institutions are exempted from the payment of a bonus.
Thank you.
From India, Bangalore
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An employee is eligible for a bonus if they have worked a minimum of 30 days in a calendar year and are paid based on Basic + DA. Employees earning wages up to Rs. 10,000 per month or less are eligible for a bonus. However, for calculation purposes, a maximum of Rs. 3500 per month will be considered for bonus calculation, even if an employee's earnings are up to Rs. 10,000 per month. The bonus must be paid at a rate of 8.33% of the minimum salary.
The Act does not apply to employees of LIC, general insurance, Red Cross, universities, educational institutions, chambers of commerce, and social welfare institutions.
From United Kingdom, London
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The Act does not apply to employees of LIC, general insurance, Red Cross, universities, educational institutions, chambers of commerce, and social welfare institutions.
From United Kingdom, London
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Dear Ningjems, Please read the attachment FAQ regarding Payment of Bonus Act. Hope your doubts may clear with this. Thanks & regards, Jaspal Negi
From India, Mumbai
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From India, Mumbai
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Hi Jaspal,
It's really a very informative document on the rules and calculations for the bonus, and it will clear all doubts regarding bonuses. Additionally, as companies are using advanced HR and Payroll software, they must have a module for bonuses or incentives that facilitates easy calculations and alerts for deserving/eligible employees for bonuses.
From India, Lucknow
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It's really a very informative document on the rules and calculations for the bonus, and it will clear all doubts regarding bonuses. Additionally, as companies are using advanced HR and Payroll software, they must have a module for bonuses or incentives that facilitates easy calculations and alerts for deserving/eligible employees for bonuses.
From India, Lucknow
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Dear Sir,
If the employee has put in 8 months of service and is employed by a cooperative society registered under the Society Registration Act, is it compulsory to pay a bonus? The employee draws 6500 a month.
Please clarify.
Bala
From India, Mumbai
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If the employee has put in 8 months of service and is employed by a cooperative society registered under the Society Registration Act, is it compulsory to pay a bonus? The employee draws 6500 a month.
Please clarify.
Bala
From India, Mumbai
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Dear Ningjems,
As per the Bonus Act of 1965, every employer is obligated to pay every employee a minimum bonus of 8.33% of the salary or wage earned by the employee (i.e., basic + DA) during the accounting year or one hundred rupees, whichever is higher, regardless of whether the employer has any allocable surplus in the accounting year.
1) The Bonus Act applies to every employee drawing a monthly salary or wage (i.e., basic + DA) of Rs. 3500 up to Rs. 10000.
2) The term "salary" in this act refers only to the basic and DA (basic + DA).
3) The monthly basic salary cannot be less than Rs. 3500 as the Minimum Wage Act comes into play (every state has a minimum wage of more than Rs. 3500).
Thank you for your attention to these regulations.
Best regards,
[Your Name] [Your Title]
From India, Mumbai
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As per the Bonus Act of 1965, every employer is obligated to pay every employee a minimum bonus of 8.33% of the salary or wage earned by the employee (i.e., basic + DA) during the accounting year or one hundred rupees, whichever is higher, regardless of whether the employer has any allocable surplus in the accounting year.
1) The Bonus Act applies to every employee drawing a monthly salary or wage (i.e., basic + DA) of Rs. 3500 up to Rs. 10000.
2) The term "salary" in this act refers only to the basic and DA (basic + DA).
3) The monthly basic salary cannot be less than Rs. 3500 as the Minimum Wage Act comes into play (every state has a minimum wage of more than Rs. 3500).
Thank you for your attention to these regulations.
Best regards,
[Your Name] [Your Title]
From India, Mumbai
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Dear Bala, Yes, the employee is entitled to get a minimum bonus of 8.33% of his salary or wage(basic + DA).
From India, Mumbai
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From India, Mumbai
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Dear Sir If employee is earning salary more than 10000 salary is it compulsory to give him bonus. Regards, Shankar
From India, Bengaluru
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From India, Bengaluru
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Dear Sankar, NO, if an employee is drawing a wage of more than Rs. 10,000/-(Basic + DA) per month then it is not compulsory to give him bonus.
From India, Mumbai
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From India, Mumbai
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An Employees monthly gross salary is Rs.12000. His basic + DA is Rs.8000. Is this employee eligible for bonus ??
From India, Mumbai
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From India, Mumbai
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Dear Abhay, Yes, he is eligible for a bonus of Rs. 292/- per month.(3500*8.33%)
From India, Mumbai
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From India, Mumbai
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Dear Mr. Ningjems,
For the purpose of the calculation of a bonus for any eligible employees, salary or wage includes basic wage/salary and dearness allowance only. Other allowances such as OT, HRA, Traveling Concessions, Food Allowance, Washing Allowance, Conveyance Allowance, ESI & EPF contributions, retrenchment compensation, incentives, gratuity, or commission will be excluded from the ambit of bonus calculation.
Thank you,
Anil Sharma
From India, Pune
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For the purpose of the calculation of a bonus for any eligible employees, salary or wage includes basic wage/salary and dearness allowance only. Other allowances such as OT, HRA, Traveling Concessions, Food Allowance, Washing Allowance, Conveyance Allowance, ESI & EPF contributions, retrenchment compensation, incentives, gratuity, or commission will be excluded from the ambit of bonus calculation.
Thank you,
Anil Sharma
From India, Pune
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No Dear, employee is not entitle to attain bonus because Basic+DA should not exceed 3500 /-
From India, New Delhi
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From India, New Delhi
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Dear Ms. Anjali,
Please address the question from Mr. Ningjems, who has inquired about the components on which the bonus is calculated. In response to this query, please provide a specific and distinct answer.
Ensure precision when addressing queries raised by individuals.
Thank you,
Anil Sharma
From India, Pune
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Please address the question from Mr. Ningjems, who has inquired about the components on which the bonus is calculated. In response to this query, please provide a specific and distinct answer.
Ensure precision when addressing queries raised by individuals.
Thank you,
Anil Sharma
From India, Pune
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Dear Seniors,
Thank you very much for your prompt reply, especially Mr. Anand, Mr. Jaspal, and Mr. Anil Sharma for your insightful replies.
So, according to my queries and all your discussions and replies, I would like to summarize the following points:
1) According to the Bonus Act, the eligibility for a bonus is for those earning below a salary of Rs. 10,000.
Here, the term "salary below Rs. 10,000" refers to an employee's monthly BASIC salary (or in case of Dearness Allowance where applicable), which is similarly accounted for in EPF. This excludes other allowances such as OT, HRA, Traveling Concessions, Food Allowance, Washing Allowance, Conveyance Allowance, ESI & EPF contributions, retrenchment compensation, incentives, and gratuity.
Concluding remarks: Bonus is calculated based on Basic and DA.
2) For calculation purposes, a maximum of Rs. 3,500 per month will be considered for bonus calculation if an employee's BASIC + DA is below or equal to Rs. 10,000 per month, and the bonus has to be paid at 8.33% of the salary.
Concluding remarks: Rs. 3,500 is the Bonus AMOUNT for any/all Employees annually enjoying a SALARY (BASIC + DA) less than or equal to Rs. 10,000.
NB: Can the practice of paying a bonus on a monthly basis be allowed? Some pay a minimum of 8.33% of Rs. 3,500, i.e., Rs. 292.
3) The questions regarding BONUS exemptions are still UNCLEAR.
Are institutions like HOSPITALS (Apollo, Fortis, etc.) and Medical Diagnostics setups like (SRL Diagnostics, Roche Diagnostics) exempted from the payment of Bonus? I would like to be very specific. If there is any NOTICE/CIRCULAR, please let me know.
Correct Spelling and Grammar: Identify and fix any spelling or grammatical mistakes in the text.
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Preserve the Meaning: While correcting the grammar and spelling, make sure the original meaning and tone of the message remain unchanged.
From India, Bangalore
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Thank you very much for your prompt reply, especially Mr. Anand, Mr. Jaspal, and Mr. Anil Sharma for your insightful replies.
So, according to my queries and all your discussions and replies, I would like to summarize the following points:
1) According to the Bonus Act, the eligibility for a bonus is for those earning below a salary of Rs. 10,000.
Here, the term "salary below Rs. 10,000" refers to an employee's monthly BASIC salary (or in case of Dearness Allowance where applicable), which is similarly accounted for in EPF. This excludes other allowances such as OT, HRA, Traveling Concessions, Food Allowance, Washing Allowance, Conveyance Allowance, ESI & EPF contributions, retrenchment compensation, incentives, and gratuity.
Concluding remarks: Bonus is calculated based on Basic and DA.
2) For calculation purposes, a maximum of Rs. 3,500 per month will be considered for bonus calculation if an employee's BASIC + DA is below or equal to Rs. 10,000 per month, and the bonus has to be paid at 8.33% of the salary.
Concluding remarks: Rs. 3,500 is the Bonus AMOUNT for any/all Employees annually enjoying a SALARY (BASIC + DA) less than or equal to Rs. 10,000.
NB: Can the practice of paying a bonus on a monthly basis be allowed? Some pay a minimum of 8.33% of Rs. 3,500, i.e., Rs. 292.
3) The questions regarding BONUS exemptions are still UNCLEAR.
Are institutions like HOSPITALS (Apollo, Fortis, etc.) and Medical Diagnostics setups like (SRL Diagnostics, Roche Diagnostics) exempted from the payment of Bonus? I would like to be very specific. If there is any NOTICE/CIRCULAR, please let me know.
Correct Spelling and Grammar: Identify and fix any spelling or grammatical mistakes in the text.
Handle Line Breaks: Ensure there is a single line break between paragraphs. If there are multiple line breaks, reduce them to one.
Preserve the Meaning: While correcting the grammar and spelling, make sure the original meaning and tone of the message remain unchanged.
From India, Bangalore
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Dear All,
From all the points mentioned above, it is still not clear about the basis of bonus calculation. Kindly correct me if my understanding is wrong:
1. Bonus is given to employees earning less than 10,000 Gross Salary.
2. Bonus is calculated at 8.33% of the salary.
Does this mean that if we pay 8.33%, it is almost equivalent to one month's salary? Or is the bonus calculation 8.33% of only Basic + DA, excluding the other components of the salary?
Thank you. I am eagerly waiting for an early response on this matter.
From India, Bangalore
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From all the points mentioned above, it is still not clear about the basis of bonus calculation. Kindly correct me if my understanding is wrong:
1. Bonus is given to employees earning less than 10,000 Gross Salary.
2. Bonus is calculated at 8.33% of the salary.
Does this mean that if we pay 8.33%, it is almost equivalent to one month's salary? Or is the bonus calculation 8.33% of only Basic + DA, excluding the other components of the salary?
Thank you. I am eagerly waiting for an early response on this matter.
From India, Bangalore
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