Hi - If any organization provides salary in following head , basic, HRA and special allowance. Special allowance paid to all employees. Should we include basic + special allowance under wages to check eligibility of applicability of bonus act.
For example one person getting 15000 as basic and 10000 as special allowance per month, total 25000 , bonus act is applicable to him or not?
From India, Delhi
1For example one person getting 15000 as basic and 10000 as special allowance per month, total 25000 , bonus act is applicable to him or not?
From India, Delhi
Hi Naveen,
Under the Payment of Bonus Act, 1965, the term "wages" is defined as all remuneration capable of being expressed in terms of money, which would include basic salary and dearness allowance (if any), but excludes other allowances like house rent allowance (HRA), overtime, bonus, and special allowances.
For the purpose of determining eligibility for the Payment of Bonus Act:
Basic Salary and Dearness Allowance (DA) (if applicable) are considered as wages.
Special Allowance is generally not considered a part of wages under the Bonus Act, as it is typically treated separately from basic salary and DA.
In your example:
Basic Salary: ₹15,000
Special Allowance: ₹10,000
Total Salary: ₹25,000
However, for the purpose of the Bonus Act, only the Basic Salary (₹15,000) would typically be considered when determining eligibility.
Eligibility for Bonus Act:
As per the Payment of Bonus Act, the Act is applicable to employees whose salary (basic + DA) does not exceed ₹21,000 per month.
Since in your example, the basic salary is ₹15,000, the employee would be eligible for the bonus under the Act, as their "wages" are below the threshold.
Thanks
From India, Bangalore
Under the Payment of Bonus Act, 1965, the term "wages" is defined as all remuneration capable of being expressed in terms of money, which would include basic salary and dearness allowance (if any), but excludes other allowances like house rent allowance (HRA), overtime, bonus, and special allowances.
For the purpose of determining eligibility for the Payment of Bonus Act:
Basic Salary and Dearness Allowance (DA) (if applicable) are considered as wages.
Special Allowance is generally not considered a part of wages under the Bonus Act, as it is typically treated separately from basic salary and DA.
In your example:
Basic Salary: ₹15,000
Special Allowance: ₹10,000
Total Salary: ₹25,000
However, for the purpose of the Bonus Act, only the Basic Salary (₹15,000) would typically be considered when determining eligibility.
Eligibility for Bonus Act:
As per the Payment of Bonus Act, the Act is applicable to employees whose salary (basic + DA) does not exceed ₹21,000 per month.
Since in your example, the basic salary is ₹15,000, the employee would be eligible for the bonus under the Act, as their "wages" are below the threshold.
Thanks
From India, Bangalore
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Special Allowance not part of Basic Wages.pdf