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The Payment Of Bonus Act 1965-Update-02- 01.01.16-Wage - 21K- Min Bons 7K-01.04.14.pdf![](\"/images/attach/jpg.gif\")
Amendment to Payment of Bonus Act 2015.jpg
Dear Seniors,
One of the employees has only worked for 41 days in the financial year 2015-16. After working for 41 days, including weekly offs, he resigned. Please suggest whether he is eligible for a 1-month bonus, a 2-month bonus, or the full amount of 7000/-.
Regards,
Anil Jha
From India, Gurgaon
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1One of the employees has only worked for 41 days in the financial year 2015-16. After working for 41 days, including weekly offs, he resigned. Please suggest whether he is eligible for a 1-month bonus, a 2-month bonus, or the full amount of 7000/-.
Regards,
Anil Jha
From India, Gurgaon
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Please find the extract of the act. Follow the same.
Section 8 in The Payment of Bonus Act, 1965
8. Eligibility for bonus.—Every employee shall be entitled to be paid by his employer in an accounting year, bonus, in accordance with the provisions of this Act, provided he has worked in the establishment for not less than thirty working days in that year.
From India, Chennai
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Section 8 in The Payment of Bonus Act, 1965
8. Eligibility for bonus.—Every employee shall be entitled to be paid by his employer in an accounting year, bonus, in accordance with the provisions of this Act, provided he has worked in the establishment for not less than thirty working days in that year.
From India, Chennai
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Dear Anil,
As per the provisions of the Payment of Bonus Act, he is entitled to a bonus based on the number of working days in a particular financial year. However, considering his earnings are less than 21000 PM, he will be paid a bonus pro rata at 7000 PM for the specific days only.
Thanks
From India
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As per the provisions of the Payment of Bonus Act, he is entitled to a bonus based on the number of working days in a particular financial year. However, considering his earnings are less than 21000 PM, he will be paid a bonus pro rata at 7000 PM for the specific days only.
Thanks
From India
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Dear Anil,
As per Section 8 of the Bonus Act, if an employee has worked for 30 working days, they can be eligible for a bonus in that year. Out of 41 days, you can count the number of working days, and if it is 30 or more, then the employee is eligible for a bonus. You can then pay them a bonus based on their earnings.
Thank you.
From India, Pune
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As per Section 8 of the Bonus Act, if an employee has worked for 30 working days, they can be eligible for a bonus in that year. Out of 41 days, you can count the number of working days, and if it is 30 or more, then the employee is eligible for a bonus. You can then pay them a bonus based on their earnings.
Thank you.
From India, Pune
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Dear All,
The employee salary is as follows:
- 16000 basic
- 2000 Conveyance allowances, total 18000/- PM
However, our state minimum wage is 7980/-. As the employee has worked only 41 days, please tell me how the bonus will be calculated in this situation.
From India, Gurgaon
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The employee salary is as follows:
- 16000 basic
- 2000 Conveyance allowances, total 18000/- PM
However, our state minimum wage is 7980/-. As the employee has worked only 41 days, please tell me how the bonus will be calculated in this situation.
From India, Gurgaon
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Please note if the basic is Rs. 16,000/- per month, the bonus will be calculated as under:
Suppose for the 1st full month - salary earned Rs. 16,000/- Next month (41-30=11) - salary earned Rs. 5,867/- Total Rs. 21,867/- Bonus = Earned wage x %age of bonus (Say 21,867 * 8.33% i.e. minimum = Rs. 1,822/-) (Percentage depends upon the allocable surplus for the year).
But please make sure that the person concerned must have worked for at least 30 days in the accounting year. The minimum wages of your State do not matter in this case. According to the notification where the minimum wage in any State is less than Rs. 7,000/- per month, the wage for bonus purpose will be taken into account at Rs. 7,000/- per month and in other cases Rs. 7,000/- or actual wage, whichever is higher.
P. K. Sharma
From India, Delhi
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Suppose for the 1st full month - salary earned Rs. 16,000/- Next month (41-30=11) - salary earned Rs. 5,867/- Total Rs. 21,867/- Bonus = Earned wage x %age of bonus (Say 21,867 * 8.33% i.e. minimum = Rs. 1,822/-) (Percentage depends upon the allocable surplus for the year).
But please make sure that the person concerned must have worked for at least 30 days in the accounting year. The minimum wages of your State do not matter in this case. According to the notification where the minimum wage in any State is less than Rs. 7,000/- per month, the wage for bonus purpose will be taken into account at Rs. 7,000/- per month and in other cases Rs. 7,000/- or actual wage, whichever is higher.
P. K. Sharma
From India, Delhi
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Sorry, the above working is wrong.
Bonus is to be paid on actual bonus subject to a ceiling of ₹7000 or minimum wages, whichever is higher. Since minimum wages are higher, that will be taken into account.
Please compute his total basic for the entire period of his working with you, computed at minimum wages level, and give a bonus of 8.33% of that amount. However, if the allocable surplus is higher (effectively meaning you are highly profitable), you will need to pay at 20%, not 8.33%. This will then need to be paid to the employee at the time of disbursement of the bonus next year. Most people don't bother with that actually.
From India, Mumbai
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Bonus is to be paid on actual bonus subject to a ceiling of ₹7000 or minimum wages, whichever is higher. Since minimum wages are higher, that will be taken into account.
Please compute his total basic for the entire period of his working with you, computed at minimum wages level, and give a bonus of 8.33% of that amount. However, if the allocable surplus is higher (effectively meaning you are highly profitable), you will need to pay at 20%, not 8.33%. This will then need to be paid to the employee at the time of disbursement of the bonus next year. Most people don't bother with that actually.
From India, Mumbai
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sir.. i am bit confused weather bonus will be calculate on earned wages*8.33% or on our state minimum wages as it is higher then ceiling limit 7000
From India, Gurgaon
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From India, Gurgaon
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It will be computed on state minimum wages * 8.33% That is provided for in the new bonus act passed by Modi government
From India, Mumbai
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From India, Mumbai
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Please go through the clarification above. Bonus is calculated on earned wage only. P K Sharma
From India, Delhi
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From India, Delhi
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Dear Anonymous, Mr. Anil Jha and others,
Anil is saying that a person has 41 working days during that financial year. Why then confuse him? The calculation shown with an example of Apex Management given by Mr. PK Sharma is correct. Anil, you take care of the percentage part to arrive at the bonus amount.
Regards, RDS Yadav Labour Law Advisor navtaranghrs@gmail.com 08439811539
From India, Delhi
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Anil is saying that a person has 41 working days during that financial year. Why then confuse him? The calculation shown with an example of Apex Management given by Mr. PK Sharma is correct. Anil, you take care of the percentage part to arrive at the bonus amount.
Regards, RDS Yadav Labour Law Advisor navtaranghrs@gmail.com 08439811539
From India, Delhi
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Dear Seniors,
I also have a doubt regarding how to calculate the bonus. One employee's joining date is 23/5/2015, and she left the company on 16/7/2016.
Please let me know how the bonus will be calculated for FY 2015-16 and for FY 2016-17. Will it be calculated based on earned wages, the 7000 ceiling limit, or our state minimum wages?
Best Regards,
Aman
From India, Jaipur
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I also have a doubt regarding how to calculate the bonus. One employee's joining date is 23/5/2015, and she left the company on 16/7/2016.
Please let me know how the bonus will be calculated for FY 2015-16 and for FY 2016-17. Will it be calculated based on earned wages, the 7000 ceiling limit, or our state minimum wages?
Best Regards,
Aman
From India, Jaipur
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Dear Aman, Please go through the earlier comments. P K Sharma
From India, Delhi
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From India, Delhi
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Dear PK Sharma,
In your earlier post, you calculated the bonus on earned wages. However, in practice, I have observed many HR and Labour Laws consultants who calculate the bonus either based on the 7000 ceiling limit or the state minimum wages, whichever is higher.
Please clarify in which case the bonus will be calculated on 7000 or state minimum wages.
Thanks,
Aman
From India, Jaipur
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In your earlier post, you calculated the bonus on earned wages. However, in practice, I have observed many HR and Labour Laws consultants who calculate the bonus either based on the 7000 ceiling limit or the state minimum wages, whichever is higher.
Please clarify in which case the bonus will be calculated on 7000 or state minimum wages.
Thanks,
Aman
From India, Jaipur
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Aman, you have to follow the law. The Bonus Act is very clear. You have to pay a bonus in wages earned, subject to a ceiling of ₹7,000 or state minimum wages, whichever is higher. So, you need to pay the higher of:
- earned wages
- the higher of state minimum wages or ₹7,000
From India, Mumbai
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- earned wages
- the higher of state minimum wages or ₹7,000
From India, Mumbai
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Dear All,
My query is: suppose an employee's basic salary is 15K per month, which formula should be used to calculate the bonus?
(1) 15000*8.34/100
(2) 7000*8.33/100
(3) 8234*8.33/100 (based on minimum wages)
Regards,
Aman
From India, Jaipur
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My query is: suppose an employee's basic salary is 15K per month, which formula should be used to calculate the bonus?
(1) 15000*8.34/100
(2) 7000*8.33/100
(3) 8234*8.33/100 (based on minimum wages)
Regards,
Aman
From India, Jaipur
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Aman, I think my answer twice earlier was clear enough. If you ask me the same thing again, the answer would be the same. In your case the answer is (3)
From India, Mumbai
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From India, Mumbai
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Dear P K Sharma,
In this thread, on post No. 10, you have mentioned that the bonus is calculated only on earned wages. In this regard, I am keen to know, according to you, what the meaning of the ceiling limit of 7000/- is. However, according to me, the bonus should be calculated either on 7000 or on the minimum wages for the scheduled employment fixed by the state government, whichever is higher.
I have gone through this thread, and all the members have replied differently. In this situation, how can the thread raiser get a solution? Anyway, I agree with Saswata sir. Dear P K Sir, if you still stand in support of your answer, I do request you to support your answer with any relevant section, clause, case law.
Thanks & Regards, Devesh Chauhan Practicing In Accounts, Finance, Taxation, Labour Laws
From India, Basti
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In this thread, on post No. 10, you have mentioned that the bonus is calculated only on earned wages. In this regard, I am keen to know, according to you, what the meaning of the ceiling limit of 7000/- is. However, according to me, the bonus should be calculated either on 7000 or on the minimum wages for the scheduled employment fixed by the state government, whichever is higher.
I have gone through this thread, and all the members have replied differently. In this situation, how can the thread raiser get a solution? Anyway, I agree with Saswata sir. Dear P K Sir, if you still stand in support of your answer, I do request you to support your answer with any relevant section, clause, case law.
Thanks & Regards, Devesh Chauhan Practicing In Accounts, Finance, Taxation, Labour Laws
From India, Basti
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The Payment Of Bonus Act 1965-Update-02- 01.01.16-Wage - 21K- Min Bons 7K-01.04.14.pdf
Amendment to Payment of Bonus Act 2015.jpg