Dear Friends,
Can you please clarify for me about Bonus calculations:
1. What is the minimum salary for bonus eligibility?
2. What is the maximum limit for bonus eligibility?
3. What are all emoluments considered for Bonus eligibility calculations?
4. What is the difference between Bonus and Ex-Gratia?
5. What is the statutory percentage of bonus to be given?
6. Any other details that can be useful to me regarding bonus, please post.
Thanks,
Senthil D.
From India, Hyderabad
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7Can you please clarify for me about Bonus calculations:
1. What is the minimum salary for bonus eligibility?
2. What is the maximum limit for bonus eligibility?
3. What are all emoluments considered for Bonus eligibility calculations?
4. What is the difference between Bonus and Ex-Gratia?
5. What is the statutory percentage of bonus to be given?
6. Any other details that can be useful to me regarding bonus, please post.
Thanks,
Senthil D.
From India, Hyderabad
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Dear Senthil,
There is no minimum salary for a bonus, but the minimum payment for one year is Rs. 100.
For bonus coverage, the maximum monthly salary is Rs. 10,000.
Mainly Basic+DA is taken as salary.
Allocable surplus has to be distributed among the eligible employees. The lower ceiling is 8.33%, and the upper ceiling is 20%. This is statutory and called bonus payment. If the employer gives additional payment other than statutory or payment to employees above the coverage limit, it may be called ex-gratia. Please note that bonus is mandatory, and ex-gratia is optional.
The statutory percentage ranges from 8.33% to 20%, as detailed in answer number 4.
Allocable surplus is 60% of the available surplus for banking institutions. For companies, it will be 67%. 8.33% is the percentage form of 1/12 and is equal to one month's salary (for one year). Accordingly, 20% is equivalent to 2.4 months' salary.
If the allocable surplus is not sufficient to pay 8.33%, the balance amount is to be adjusted from the next four years, which is called Set Off. If the allocable surplus is more than sufficient to pay 20%, the balance amount is to be carried forward for the next four years, which is called Set On.
Abbas.P.S
From India, Bangalore
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There is no minimum salary for a bonus, but the minimum payment for one year is Rs. 100.
For bonus coverage, the maximum monthly salary is Rs. 10,000.
Mainly Basic+DA is taken as salary.
Allocable surplus has to be distributed among the eligible employees. The lower ceiling is 8.33%, and the upper ceiling is 20%. This is statutory and called bonus payment. If the employer gives additional payment other than statutory or payment to employees above the coverage limit, it may be called ex-gratia. Please note that bonus is mandatory, and ex-gratia is optional.
The statutory percentage ranges from 8.33% to 20%, as detailed in answer number 4.
Allocable surplus is 60% of the available surplus for banking institutions. For companies, it will be 67%. 8.33% is the percentage form of 1/12 and is equal to one month's salary (for one year). Accordingly, 20% is equivalent to 2.4 months' salary.
If the allocable surplus is not sufficient to pay 8.33%, the balance amount is to be adjusted from the next four years, which is called Set Off. If the allocable surplus is more than sufficient to pay 20%, the balance amount is to be carried forward for the next four years, which is called Set On.
Abbas.P.S
From India, Bangalore
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Dear Mr. Abbas,
Thank you very much for your reply. It has cleared my long-time doubts. Usually, I will get an alert in my mail ID if anyone replied to my question on Cite HR, but I didn't receive the alert for your reply. Do you have any idea about this? Please let me know how to enable this facility.
senthil@indimmune.com
Thanks,
Senthil D.
From India, Hyderabad
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Thank you very much for your reply. It has cleared my long-time doubts. Usually, I will get an alert in my mail ID if anyone replied to my question on Cite HR, but I didn't receive the alert for your reply. Do you have any idea about this? Please let me know how to enable this facility.
senthil@indimmune.com
Thanks,
Senthil D.
From India, Hyderabad
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The statutory limit for the computation of the maximum bonus salary is to be considered as Rs. 3500/-, i.e., the ceiling for the calculation of the bonus. For example, anybody drawing a salary of more than Rs. 3500/-; his salary for the calculation of the bonus will be considered as Rs. 3500.
Regards,
Rajendra Bhavsar
From India, Mumbai
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Regards,
Rajendra Bhavsar
From India, Mumbai
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Dear Senthil,
1. There is no minimum salary limit for bonus eligibility.
2. The maximum salary limit is Rs. 10,000/-.
3. Basic + DA is considered for computing Bonus. If Basic + DA exceeds Rs. 10,000/-, then he is not eligible for a bonus. However, there is a wage ceiling of Rs. 3,500/- for the payment of a bonus. If an employee earns Rs. 3,500/- or more up to Rs. 10,000/-, then his wage should be deemed as Rs. 3,500/- only. In other words, if he earns Rs. 4,000/-, his wage will be Rs. 3,500/- only for the computation of the bonus. If he earns less than Rs. 3,500/-, say Rs. 3,400/-, then the wage will be Rs. 3,400/- for the computation of the bonus.
4. The minimum percentage of bonus is 8.33% of annual Basic + DA, and the maximum percentage is 20%.
5. As per the bonus act, the maximum bonus that a person can earn is Rs. 8,400/- per annum i.e., Rs. 3,500/- X 12 = Rs. 42,000/- @ 20% = Rs. 8,400/-.
6. Ex-gratia is something that the management is willing to give voluntarily even if the employee is not eligible to receive a bonus. The employer may not impose the wage ceiling of Rs. 3,500/- and may be willing to pay based on the actual earnings of the employee even if it exceeds Rs. 3,500/-. He may also be willing to pay a bonus if it exceeds Rs. 10,000/-.
Trust the matter is clarified.
M.V. KANNAN
From India, Madras
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1. There is no minimum salary limit for bonus eligibility.
2. The maximum salary limit is Rs. 10,000/-.
3. Basic + DA is considered for computing Bonus. If Basic + DA exceeds Rs. 10,000/-, then he is not eligible for a bonus. However, there is a wage ceiling of Rs. 3,500/- for the payment of a bonus. If an employee earns Rs. 3,500/- or more up to Rs. 10,000/-, then his wage should be deemed as Rs. 3,500/- only. In other words, if he earns Rs. 4,000/-, his wage will be Rs. 3,500/- only for the computation of the bonus. If he earns less than Rs. 3,500/-, say Rs. 3,400/-, then the wage will be Rs. 3,400/- for the computation of the bonus.
4. The minimum percentage of bonus is 8.33% of annual Basic + DA, and the maximum percentage is 20%.
5. As per the bonus act, the maximum bonus that a person can earn is Rs. 8,400/- per annum i.e., Rs. 3,500/- X 12 = Rs. 42,000/- @ 20% = Rs. 8,400/-.
6. Ex-gratia is something that the management is willing to give voluntarily even if the employee is not eligible to receive a bonus. The employer may not impose the wage ceiling of Rs. 3,500/- and may be willing to pay based on the actual earnings of the employee even if it exceeds Rs. 3,500/-. He may also be willing to pay a bonus if it exceeds Rs. 10,000/-.
Trust the matter is clarified.
M.V. KANNAN
From India, Madras
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Please note: the ceiling amount for calculation of Bonus has been enhansed from Rs3500 to Rs6500
From India, Bangalore
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From India, Bangalore
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if second day from date of joining employee was expired on duty. In this case employee eligible for gratuity ? if yes please provide calculation detail. if no, why ? Thanks Managobinda Behera
From India, Valsad
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From India, Valsad
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Hi Mr. Kannan, I've a query: if the basic of an employee exceeds Rs. 10,000/-, then will he be eligible for a bonus and if yes, what will be the amount? Awaiting your reply.
Thanks and regards, coolchini
From India, Mumbai
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Thanks and regards, coolchini
From India, Mumbai
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Dear Friends,
I have a query. If the salary (Basic + DA) of an employee is $3300 per month, then will the bonus be calculated on $3300 or on a minimum of $3500 as mentioned in the checklist of labor laws (attached herewith)? Please clarify the calculation part.
Thanks & Regards,
Neelam Nailwal
From India, Lucknow
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I have a query. If the salary (Basic + DA) of an employee is $3300 per month, then will the bonus be calculated on $3300 or on a minimum of $3500 as mentioned in the checklist of labor laws (attached herewith)? Please clarify the calculation part.
Thanks & Regards,
Neelam Nailwal
From India, Lucknow
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1. What is the minimum salary for bonus eligibility?
Answer: There is no minimum salary for calculation of bonus. However, there is a maximum salary, i.e., BASIC+DA up to ₹10,000 are entitled for bonus. A minimum Bonus of ₹100 should be paid.
2. What is the maximum limit for bonus eligibility?
Answer: BASIC+DA up to ₹10,000 and below.
3. What are all emoluments considered for bonus eligibility calculations?
Answer: BASIC+DA.
4. What is the difference between Bonus and Ex-Gratia?
Answer: The amount that is paid over and above the bonus is called Ex-Gratia. Bonus is a lawful obligation on the employer, whereas ex-gratia is at the employer's discretion to pay over and above the minimum or maximum bonus.
5. What is the statutory percentage of bonus to be given?
Answer: Minimum 8.33% and Maximum 20% (on BASIC + DA).
6. Any other details that can be useful to me regarding bonus, please post.
Answer: Refer to The Payment of Bonus Act.
From India, Pune
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Answer: There is no minimum salary for calculation of bonus. However, there is a maximum salary, i.e., BASIC+DA up to ₹10,000 are entitled for bonus. A minimum Bonus of ₹100 should be paid.
2. What is the maximum limit for bonus eligibility?
Answer: BASIC+DA up to ₹10,000 and below.
3. What are all emoluments considered for bonus eligibility calculations?
Answer: BASIC+DA.
4. What is the difference between Bonus and Ex-Gratia?
Answer: The amount that is paid over and above the bonus is called Ex-Gratia. Bonus is a lawful obligation on the employer, whereas ex-gratia is at the employer's discretion to pay over and above the minimum or maximum bonus.
5. What is the statutory percentage of bonus to be given?
Answer: Minimum 8.33% and Maximum 20% (on BASIC + DA).
6. Any other details that can be useful to me regarding bonus, please post.
Answer: Refer to The Payment of Bonus Act.
From India, Pune
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