Dear Seniors,
I am working with a manufacturing company of glass as an HR manager. Please advise me on how to calculate the bonus in a manufacturing company, what the basic salary for this division is, what the criteria for the bonus are, and how it should be calculated according to the current norms.
Looking forward to hearing from you soon.
Warm Regards,
Kavita Pal
From India, Ghaziabad
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I am working with a manufacturing company of glass as an HR manager. Please advise me on how to calculate the bonus in a manufacturing company, what the basic salary for this division is, what the criteria for the bonus are, and how it should be calculated according to the current norms.
Looking forward to hearing from you soon.
Warm Regards,
Kavita Pal
From India, Ghaziabad
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Dear Ms. Kavita,
As per the Bonus Act, wages should be Rs. 3500 per month. The percentage ranges from 8.33% to 20%, depending upon the profit of the company.
Hence, 3500 x 8.33% = Rs. 292 per month or Rs. 3504 per annum.
If you calculate for the maximum percentage, then 3500 x 20% = Rs. 700 per month or Rs. 8400 per annum.
From India, Madurai
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15As per the Bonus Act, wages should be Rs. 3500 per month. The percentage ranges from 8.33% to 20%, depending upon the profit of the company.
Hence, 3500 x 8.33% = Rs. 292 per month or Rs. 3504 per annum.
If you calculate for the maximum percentage, then 3500 x 20% = Rs. 700 per month or Rs. 8400 per annum.
From India, Madurai
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Dear Ms. Kavita,
First of all, it is essential to calculate the bonus as per Schedule II of the Payment of Bonus Act (non-banking organization) - to determine the available surplus, allocable surplus, set on, and set off. Only then is it possible to arrive at the quantum of the bonus, as mentioned by Vignesh Kumar. Please consult the Accounts department, which will take care of this. It is always better to audit the bonus account every year to ensure compliance with the Payment of Bonus Act; otherwise, it may become a customary bonus.
S. K. Bandyopadhyay
USD HR Solutions
Email: skb@usdhrs.in
From India, New Delhi
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First of all, it is essential to calculate the bonus as per Schedule II of the Payment of Bonus Act (non-banking organization) - to determine the available surplus, allocable surplus, set on, and set off. Only then is it possible to arrive at the quantum of the bonus, as mentioned by Vignesh Kumar. Please consult the Accounts department, which will take care of this. It is always better to audit the bonus account every year to ensure compliance with the Payment of Bonus Act; otherwise, it may become a customary bonus.
S. K. Bandyopadhyay
USD HR Solutions
Email: skb@usdhrs.in
From India, New Delhi
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Hi Pal,
1. For calculation of Bonus, Salary/Wage of all employees whose per month salary (Basic + DA) exceeds Rs. 3500/- but less than Rs. 10,000/-, shall be taken as Rs. 3500/- only.
2. Computation of bonus is to be worked out as per Schedule I to IV of the Act.
3. The method for calculation of annual bonus is as follows:
Calculate the Available Surplus.
Available Surplus =
Gross Profit – (deduct) the following :
Depreciation admissible u/s 32 of the Income tax Act.
Development allowance
Calculation of Bonus is shown as under
Minimum Bonus Rs 3500 X 8.33% = Rs.3504/ PA,
Maximum Bonus Rs 3500 X 20%= Rs 8400/ PA
From India, Calcutta
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1. For calculation of Bonus, Salary/Wage of all employees whose per month salary (Basic + DA) exceeds Rs. 3500/- but less than Rs. 10,000/-, shall be taken as Rs. 3500/- only.
2. Computation of bonus is to be worked out as per Schedule I to IV of the Act.
3. The method for calculation of annual bonus is as follows:
Calculate the Available Surplus.
Available Surplus =
Gross Profit – (deduct) the following :
Depreciation admissible u/s 32 of the Income tax Act.
Development allowance
Calculation of Bonus is shown as under
Minimum Bonus Rs 3500 X 8.33% = Rs.3504/ PA,
Maximum Bonus Rs 3500 X 20%= Rs 8400/ PA
From India, Calcutta
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Hi Sibabrata, Can you please tell me the amount for bonus to be calculated for the employees whose salary exceeds above Rs 10000/-? Regards, Aishwarya
From India, Badnawar
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From India, Badnawar
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Dear Anonymous,
In response to your query, I would like to submit that if an employee is drawing a salary of more than Rs 10,000 per month (assuming Basic & DA), he does not fall within the purview of the Bonus Act. Hence, he is not entitled to receive any bonus under the Act.
However, some good employers, in order to motivate their employees, consider paying ex-gratia payment at their discretion instead of a bonus.
From India, Calcutta
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In response to your query, I would like to submit that if an employee is drawing a salary of more than Rs 10,000 per month (assuming Basic & DA), he does not fall within the purview of the Bonus Act. Hence, he is not entitled to receive any bonus under the Act.
However, some good employers, in order to motivate their employees, consider paying ex-gratia payment at their discretion instead of a bonus.
From India, Calcutta
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Hi Sibabrata Mam,
I'm working in a small-scale manufacturing firm as an HR Executive. Our organization has given the operators paid holiday for Diwali and the next day, i.e., 23rd Oct and 24th Oct. 25th being Saturday, many of the operators didn't come to work, and 26th was Sunday, so they got leave for 4 consecutive days. However, the management insisted on taking strict actions against the employees who were absent on 25th as they were informed earlier about the deductions. They informed me that the ones who were absent on 25th will not be paid for 23rd, 24th, and 26th. Is this rule mentioned in the Factories Act, 1948? I am aware of the "sandwich rule," but is it applicable for 23rd Oct as well? The operators worked a day before 23rd Oct, and it was Diwali. This situation has created a lot of tension in the work environment. Kindly suggest a suitable course of action.
From India, Badnawar
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I'm working in a small-scale manufacturing firm as an HR Executive. Our organization has given the operators paid holiday for Diwali and the next day, i.e., 23rd Oct and 24th Oct. 25th being Saturday, many of the operators didn't come to work, and 26th was Sunday, so they got leave for 4 consecutive days. However, the management insisted on taking strict actions against the employees who were absent on 25th as they were informed earlier about the deductions. They informed me that the ones who were absent on 25th will not be paid for 23rd, 24th, and 26th. Is this rule mentioned in the Factories Act, 1948? I am aware of the "sandwich rule," but is it applicable for 23rd Oct as well? The operators worked a day before 23rd Oct, and it was Diwali. This situation has created a lot of tension in the work environment. Kindly suggest a suitable course of action.
From India, Badnawar
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