Hello Seniors,
I require your guidance. I want to know how much percentage of bonus is legally necessary to pay if the company is profitable and wants to pay a bonus for the 3rd financial year. Kindly guide.
Regards
From India
Acknowledge(0)
Amend(0)
12I require your guidance. I want to know how much percentage of bonus is legally necessary to pay if the company is profitable and wants to pay a bonus for the 3rd financial year. Kindly guide.
Regards
From India
Acknowledge(0)Amend(0)
Dear Madhurapurab,
It is mandatory to give a minimum bonus, i.e., 8.33% in a year and a maximum of 20%. If you give a bonus today and think that in the next year, will I be able to give a bonus, then it's better to go for the minimum bonus for safety.
Nidhi
From India, Ahmadabad
Acknowledge(0)Amend(0)
It is mandatory to give a minimum bonus, i.e., 8.33% in a year and a maximum of 20%. If you give a bonus today and think that in the next year, will I be able to give a bonus, then it's better to go for the minimum bonus for safety.
Nidhi
From India, Ahmadabad
Acknowledge(0)Amend(0)
Hello Nidhi, my main question is, if the company is a profit-making organization, then what percentage do we need to pay in the third year? Also, if we need to pay it in the future for the fourth and fifth year, do we need to follow the same 8.33% formula or should we use a different formula?
I need more guidance from you, friends.
Regards
From India
Acknowledge(0)Amend(0)
I need more guidance from you, friends.
Regards
From India
Acknowledge(0)Amend(0)
As you said, if the company is profitable, decide how much bonus you can give, but 8.33% is a must. If in the 3rd financial year you find the company is progressing, increase your bonus rate. You can go up to 20%. You can change this every year based on the performance of the company.
Is it clear now?
Regards,
Nidhi
From India, Ahmadabad
Acknowledge(0)Amend(0)
Is it clear now?
Regards,
Nidhi
From India, Ahmadabad
Acknowledge(0)Amend(0)
Hi Madhura, you have to pay a minimum of 8.33% bonus. If your company is profitable, you can pay a bonus up to a maximum of 20%. If there is still an allocable surplus left, you can continue giving bonuses for up to 4 years at 20%.
Now, as per your question, the bonus you will be paying in the 3rd year entirely depends on your company's profit. If your organization is continuously profitable, you can give up to 20%. If not, then at least 8.33%. Suppose you are unable to pay even 8.33%, then the deficit amount can be carried forward to the next year.
From India, Vijayawada
Acknowledge(0)Amend(0)
Now, as per your question, the bonus you will be paying in the 3rd year entirely depends on your company's profit. If your organization is continuously profitable, you can give up to 20%. If not, then at least 8.33%. Suppose you are unable to pay even 8.33%, then the deficit amount can be carried forward to the next year.
From India, Vijayawada
Acknowledge(0)Amend(0)
Dear Madurpurab, Neha and Nidhi are both correct. If you are still facing problems, please refer to the 4th Schedule of the Payment of Bonus Act, 1965, Sections 15 and 16, to understand the set on and set off process. Calculate it based on the gross profit of your balance sheet. Additionally, if you have a union and have engaged in collective bargaining resulting in a settlement regarding the payment of a certain percentage of bonus, then refer to Section 31-A of the same act. I hope this information is helpful.
Regards, Vijay Manager-HR (Noble Group)
From India, Jaipur
Acknowledge(0)Amend(0)
Regards, Vijay Manager-HR (Noble Group)
From India, Jaipur
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
Amendment to Payment of Bonus Act 2015.jpg
Bigger bonuses for more as Lok Sabha amends Payment of Bonus Act - The Economic Times.pdf
THE PAYMENT OF BONUS ACT.doc