1
All employees who are drawing salary (Basic + DA only) not more than Rs 10000 and who had worked at least for 30 days in the financial year (say 2008-09) will be eligible for bonus.
The minimum bonus is 8.33% and the maximum bonus is 20%. In between these two extremes, bonus is fixed by the employer ( in consultation with employees if they demand so) on the basis of available surplus.
For calculating bonus take the qualifying salary (Basic salary + DA, if any) earned by each employee during the year (2008-09). Find the bonus at the rate fixed, say 8.33%/ 12% or even 20%.
While doing so, salary of all employees whose salary (Basic + DA) exceed Rs 3500 but less than Rs 10000 shall be taken as Rs 3500 only. Therefore, an employee whose salary is Rs 6500 will also be getting bonus on Rs 3500 only. If any employee whose salary exceeded Rs 3500 had been on Loss of Pay, then proportionate deduction shall be made from Rs 3500 so that the Loss of Pay should also have bearing on bonus. Taking the same example, if an employees salary is Rs 6500 and he had some LOP days and aftyer deducting such LOPs his salary might still be Rs 5000 or 4000 and if so, he will be entitled for bonus on a base salary of Rs 3500. This is not logic and therefore, LOP deduction for Bonus calculation should be made on Rs 3500
From India, Kannur
The minimum bonus is 8.33% and the maximum bonus is 20%. In between these two extremes, bonus is fixed by the employer ( in consultation with employees if they demand so) on the basis of available surplus.
For calculating bonus take the qualifying salary (Basic salary + DA, if any) earned by each employee during the year (2008-09). Find the bonus at the rate fixed, say 8.33%/ 12% or even 20%.
While doing so, salary of all employees whose salary (Basic + DA) exceed Rs 3500 but less than Rs 10000 shall be taken as Rs 3500 only. Therefore, an employee whose salary is Rs 6500 will also be getting bonus on Rs 3500 only. If any employee whose salary exceeded Rs 3500 had been on Loss of Pay, then proportionate deduction shall be made from Rs 3500 so that the Loss of Pay should also have bearing on bonus. Taking the same example, if an employees salary is Rs 6500 and he had some LOP days and aftyer deducting such LOPs his salary might still be Rs 5000 or 4000 and if so, he will be entitled for bonus on a base salary of Rs 3500. This is not logic and therefore, LOP deduction for Bonus calculation should be made on Rs 3500
From India, Kannur
Hi Ambica
Please find the answer of you query--
Salary for Bonus Calculation: Sec-12
• For Calculation purpose Rs.3500 per months maximum will be taken even if an employee is drawing upto Rs.10000 per month.
• We calculate bonus on earn wages/salary per month.
Explanation- Calculate the salary paid during April-March of a financial year. If salary is more than Rs.3500 then it should be restricted to Rs.3500. Assuming the maximum limit.
As per the sec. 10 minimum bonus is (3500*12)*8.33% =3499. And as per the sec.11 Maximum bonus is (3500*12)*20%= 8400.
• Those who are drawing more than Rs.10000 are not covered by the act.
From India, Kota
Please find the answer of you query--
Salary for Bonus Calculation: Sec-12
• For Calculation purpose Rs.3500 per months maximum will be taken even if an employee is drawing upto Rs.10000 per month.
• We calculate bonus on earn wages/salary per month.
Explanation- Calculate the salary paid during April-March of a financial year. If salary is more than Rs.3500 then it should be restricted to Rs.3500. Assuming the maximum limit.
As per the sec. 10 minimum bonus is (3500*12)*8.33% =3499. And as per the sec.11 Maximum bonus is (3500*12)*20%= 8400.
• Those who are drawing more than Rs.10000 are not covered by the act.
From India, Kota
wat all said are the common things,they didnt tell u what r the steps for calculating bones
step 1)calculation of gross profit derived by an employer.
the gross profit derived by an employer in respect of an accounting year in case of a banking company be calculated in a manner specified in 1st schedule and in ani other case be calculated in the manner specified in the second schedule.The gross ordinarily comes from the profit and loss account or balance sheet of the company
2)computation of available surplus=gross profit-sum deductable under sec6 which are called prior charges.prior charges are any amount by way of depriciation admissible under sec 32 of income tax act or income tax law+any amount by way of development rebate or development allowance +direct tax as under sec 7+3rd schedule(such further sum as may be specified in respect of an employer)
3)calculation of allocable surplus=67% of available surplus in respect of a company other than a banking compnay and in any other case 60% of available surplus
from this available surplus bonus is given,i.e 8.33% or 20% in proportion to the salary or wage earned by the employee in that accounting year
thxx
vikas
From India, Gurgaon
step 1)calculation of gross profit derived by an employer.
the gross profit derived by an employer in respect of an accounting year in case of a banking company be calculated in a manner specified in 1st schedule and in ani other case be calculated in the manner specified in the second schedule.The gross ordinarily comes from the profit and loss account or balance sheet of the company
2)computation of available surplus=gross profit-sum deductable under sec6 which are called prior charges.prior charges are any amount by way of depriciation admissible under sec 32 of income tax act or income tax law+any amount by way of development rebate or development allowance +direct tax as under sec 7+3rd schedule(such further sum as may be specified in respect of an employer)
3)calculation of allocable surplus=67% of available surplus in respect of a company other than a banking compnay and in any other case 60% of available surplus
from this available surplus bonus is given,i.e 8.33% or 20% in proportion to the salary or wage earned by the employee in that accounting year
thxx
vikas
From India, Gurgaon
When one mentions allocable surplus and available surplus;
then one also needs to know and consider the provisions of "set-off" and "set-on"; in case the total quantum of bonus exceeds the available surplus.
Regards.
From India, Delhi
then one also needs to know and consider the provisions of "set-off" and "set-on"; in case the total quantum of bonus exceeds the available surplus.
Regards.
From India, Delhi
Hi
Where the salary or wage of an employee exceeds 4[three thousand and five hundred rupees] per mensem, the bonus payable to such employee under section 10 or, as the case may be, under section 11, shall be calculated as if his salary or wage were [two thousand and five hundred rupees] per mensem.]
Eg: Salary / Wage Rs.3500/- per month
Earning per annum : Rs.3500 x 12 months : Rs.42000 x min.bonus: 8.33% : Rs.3500/-
Rs.42000 x max.bonus: 20% : Rs.8400/-
hope the above is suffice
Tks & Regards
From India, Hyderabad
Where the salary or wage of an employee exceeds 4[three thousand and five hundred rupees] per mensem, the bonus payable to such employee under section 10 or, as the case may be, under section 11, shall be calculated as if his salary or wage were [two thousand and five hundred rupees] per mensem.]
Eg: Salary / Wage Rs.3500/- per month
Earning per annum : Rs.3500 x 12 months : Rs.42000 x min.bonus: 8.33% : Rs.3500/-
Rs.42000 x max.bonus: 20% : Rs.8400/-
hope the above is suffice
Tks & Regards
From India, Hyderabad
Replies are of course informative. It an example is given in spred sheet, it would be even more helpful. I am least aware of bonus calculation, but this has given me some insight.
From Bhutan, Phuntsholing
From Bhutan, Phuntsholing
i have a doubt here who should be taken for (3500*12)*8.33% =3499 and who should be taken for (3500*12)*20%= 8400.can i know for whom we should use what and why
From India, Madras
From India, Madras
I could not understand the difference in Mr. Madhu's reply and Mr.Vikas's. Please tell me if a person earns uneven salary during the year i.e. because of Loss of pay, leaves or absense how to calculate his Bonus. For example he is drew 2800, 3000, 3500, 3800, 4500, 3200, 3000, 3500, 4200, 4500, 4500 & 4500 (his Basic + DA is fixed @ Rs. 4500/- p.m.)
From India, Visakhapatnam
From India, Visakhapatnam
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Bonus Calculation.xls
BONUS CALCULATION RULE (1).pdf