Hi,
I need clarification on the below clause of the Payment of Bonus Act, 1965 (amendment):
ii) Amendment to section 12 of the Payment of Bonus Act, 1965 to raise the ceiling for calculation purposes from the salary or wage of Rs. 2500/- per month to Rs. 3500/- per month;
Does the phrase "ceiling for calculation purposes" imply that if the Basic+DA of an employee exceeds Rs. 3500/-, for calculation purposes, we need to consider Rs. 3500/- for each month and sum the same for 12 months to apply the percentage?
Or is there another method for calculating the bonus?
Please assist me at your earliest convenience.
Thanks and Regards,
Srinivas
09848615410
From India, Hyderabad
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I need clarification on the below clause of the Payment of Bonus Act, 1965 (amendment):
ii) Amendment to section 12 of the Payment of Bonus Act, 1965 to raise the ceiling for calculation purposes from the salary or wage of Rs. 2500/- per month to Rs. 3500/- per month;
Does the phrase "ceiling for calculation purposes" imply that if the Basic+DA of an employee exceeds Rs. 3500/-, for calculation purposes, we need to consider Rs. 3500/- for each month and sum the same for 12 months to apply the percentage?
Or is there another method for calculating the bonus?
Please assist me at your earliest convenience.
Thanks and Regards,
Srinivas
09848615410
From India, Hyderabad
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For a bonus of Rs 3500, it means basic pay plus DA for one month. An employee who earns a monthly salary of not more than Rs 10,000 will be eligible for the bonus. However, those whose salary exceeds Rs 3500 will receive a bonus calculated as if their salary is Rs 3500. This means that individuals earning Rs 7500 or Rs 9000 will be paid a bonus based on a salary of Rs 3500 per month only.
The rate of the bonus is determined by the employer based on the available profit, with a minimum of 8.33% and a maximum of 20%.
Regards,
Madhu.T.K
From India, Kannur
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4483The rate of the bonus is determined by the employer based on the available profit, with a minimum of 8.33% and a maximum of 20%.
Regards,
Madhu.T.K
From India, Kannur
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Dear Madhu,
Thank you very much. I still have a doubt about the calculation. Say an employee's basic salary is Rs 9000/- who joined on 27.02.2006. For the calculation of the bonus for 2006-07 (i.e., from April-06 to March 07), I have taken Rs 3500*12*8.33% = Rs 3499/-. Is that method correct? Or Rs 9000*12*8.33% = Rs 8997/-, which exceeds Rs 3500/-. So, Rs 3500 should be taken as suggested by one of my colleagues. Which one is correct? In my view, the limit of Rs 3500/- is not for reaching after the calculation, but for calculation purposes. In no case, the amount of basic salary should not cross Rs 3500/- for each month. Please suggest the correct method.
Thanking you in advance...
Regards, Srinivas 9848615410
From India, Hyderabad
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Thank you very much. I still have a doubt about the calculation. Say an employee's basic salary is Rs 9000/- who joined on 27.02.2006. For the calculation of the bonus for 2006-07 (i.e., from April-06 to March 07), I have taken Rs 3500*12*8.33% = Rs 3499/-. Is that method correct? Or Rs 9000*12*8.33% = Rs 8997/-, which exceeds Rs 3500/-. So, Rs 3500 should be taken as suggested by one of my colleagues. Which one is correct? In my view, the limit of Rs 3500/- is not for reaching after the calculation, but for calculation purposes. In no case, the amount of basic salary should not cross Rs 3500/- for each month. Please suggest the correct method.
Thanking you in advance...
Regards, Srinivas 9848615410
From India, Hyderabad
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Mr. Srinivas,
Mr. Madhu has clearly and correctly answered your question. The point that Mr. Madhu has tried to clarify is that if a person has a salary not more than 10,000, then they will receive a bonus. To calculate the bonus, we will consider Rs. 3,500 only as the basic + DA, regardless of whether their salary is 6,000 or 10,000.
Rs. 3500/- is used in the calculation of the bonus and is not a limit for the bonus value after calculation. I hope I have explained the same thing in a simpler manner :)
Additionally, the minimum and maximum percentages for bonus calculation, i.e., 8.33% and 20% respectively, result in a bonus range from Rs. 3,499/- to Rs. 8,400/-
If a person is receiving basic + DA less than 3500/- (which is quite unlikely), then the bonus will be calculated based on that lesser amount only.
Always Wishing Good for You...
Silky Bhardwaj
From India, Chandigarh
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Mr. Madhu has clearly and correctly answered your question. The point that Mr. Madhu has tried to clarify is that if a person has a salary not more than 10,000, then they will receive a bonus. To calculate the bonus, we will consider Rs. 3,500 only as the basic + DA, regardless of whether their salary is 6,000 or 10,000.
Rs. 3500/- is used in the calculation of the bonus and is not a limit for the bonus value after calculation. I hope I have explained the same thing in a simpler manner :)
Additionally, the minimum and maximum percentages for bonus calculation, i.e., 8.33% and 20% respectively, result in a bonus range from Rs. 3,499/- to Rs. 8,400/-
If a person is receiving basic + DA less than 3500/- (which is quite unlikely), then the bonus will be calculated based on that lesser amount only.
Always Wishing Good for You...
Silky Bhardwaj
From India, Chandigarh
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Dear Sir/Madam,
I am seeking your assistance as I left my previous company one year ago. I have applied for PF withdrawals twice, but unfortunately, there has been no response from them. Upon checking with them, I was informed that they did not receive any forms. I am currently located in Bangalore, while my previous company is based in Mumbai, and I worked at their Hyderabad office. I kindly request guidance on what steps I should take now as I am in need of the withdrawn amount.
With regards,
Rafiq
From India, Hyderabad
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I am seeking your assistance as I left my previous company one year ago. I have applied for PF withdrawals twice, but unfortunately, there has been no response from them. Upon checking with them, I was informed that they did not receive any forms. I am currently located in Bangalore, while my previous company is based in Mumbai, and I worked at their Hyderabad office. I kindly request guidance on what steps I should take now as I am in need of the withdrawn amount.
With regards,
Rafiq
From India, Hyderabad
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Bonus amount paid will not come under the definition of salary/ wages and therefore, PF or ESI should not be deducted from the amount of bonus paid. Regards, Madhu.T.K
From India, Kannur
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From India, Kannur
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Hi!
If someone's Gross Salary is $6000, with a basic of $3500, and an earned salary for 25 days in March '09, what amount will be taken into consideration for the calculation of the Bonus?
Kindly respond at your earliest convenience. Your assistance will be greatly appreciated.
Thanks & Regards,
Sunny
From India, Delhi
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If someone's Gross Salary is $6000, with a basic of $3500, and an earned salary for 25 days in March '09, what amount will be taken into consideration for the calculation of the Bonus?
Kindly respond at your earliest convenience. Your assistance will be greatly appreciated.
Thanks & Regards,
Sunny
From India, Delhi
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Dear Sunny,
The ceiling of the monthly salary for the calculation of bonus payment is Rs. 3500, i.e., Rs. 3500 for one month. If he does not have full attendance in a month, a pro-rata basis calculation is to be applied. Accordingly, for 25 days in March, it will be equal to 3500 x 25/31 = 2822.58.
Also, if the salary for one year is 3500 x 12 = Rs. 42000, the minimum bonus will be Rs. 3500 (not 3,499). This is because 8.33% is the percentage form of 1/12. Accordingly, a 20% bonus will be 2.4 times the average of one month's admissible salary.
Abbas P.S
From India, Bangalore
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The ceiling of the monthly salary for the calculation of bonus payment is Rs. 3500, i.e., Rs. 3500 for one month. If he does not have full attendance in a month, a pro-rata basis calculation is to be applied. Accordingly, for 25 days in March, it will be equal to 3500 x 25/31 = 2822.58.
Also, if the salary for one year is 3500 x 12 = Rs. 42000, the minimum bonus will be Rs. 3500 (not 3,499). This is because 8.33% is the percentage form of 1/12. Accordingly, a 20% bonus will be 2.4 times the average of one month's admissible salary.
Abbas P.S
From India, Bangalore
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