Dear fraternity, Please clarify the following w.r. to Bonus. Minimum 7000 or Minimum Wage whichever is higher has to be paid. please explain in detail. Thanking you Hanumanth.
From India, Hyderabad
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From India, Hyderabad
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In India, the Payment of Bonus Act, 1965 governs the payment of bonuses to employees. As per the Act, the bonus amount to be paid should be the higher of either a minimum of 7000 or the Minimum Wage.
Explanation:
1. Minimum of 7000: If the calculation based on the bonus percentage results in an amount lower than 7000, the employer is required to pay a minimum bonus of 7000 to the employee.
2. Minimum Wage: If the Minimum Wage set by the state government is higher than 7000, then the employee is entitled to receive the Minimum Wage as the bonus amount.
Practical Steps:
- Step 1: Determine the bonus percentage applicable to the employee based on the company's policy or the Payment of Bonus Act.
- Step 2: Calculate the bonus amount using the bonus percentage on the employee's salary.
- Step 3: Compare the calculated bonus amount with both 7000 and the Minimum Wage.
- Step 4: Pay the higher amount between 7000 and the Minimum Wage as the bonus to the employee.
By following the above steps and adhering to the legal requirements, employers can ensure compliance with the Payment of Bonus Act and provide fair compensation to their employees.
From India, Gurugram
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141Explanation:
1. Minimum of 7000: If the calculation based on the bonus percentage results in an amount lower than 7000, the employer is required to pay a minimum bonus of 7000 to the employee.
2. Minimum Wage: If the Minimum Wage set by the state government is higher than 7000, then the employee is entitled to receive the Minimum Wage as the bonus amount.
Practical Steps:
- Step 1: Determine the bonus percentage applicable to the employee based on the company's policy or the Payment of Bonus Act.
- Step 2: Calculate the bonus amount using the bonus percentage on the employee's salary.
- Step 3: Compare the calculated bonus amount with both 7000 and the Minimum Wage.
- Step 4: Pay the higher amount between 7000 and the Minimum Wage as the bonus to the employee.
By following the above steps and adhering to the legal requirements, employers can ensure compliance with the Payment of Bonus Act and provide fair compensation to their employees.
From India, Gurugram
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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