Hi Everyone, As per amendment in Bonus act the eligibility amount 10000 is replaced by 21000. Here my query that Act this amount 21000 is gross salary or basic+da. Please do the needful.
From India, Pune
11From India, Pune
Dear Yadav Sir, Thanks for reply. Calculation part is okay, but please clarify 21000 gross salary or basis + da. Also requesting you if possible please provide reference.
From India, Pune
From India, Pune
Dear sir,
The answer is Basic + DA not the Gross amount .For clarification of the term Salary or Wages, I want to take you through Sec. 2 (21) of the Payment of Bonus Act, 1965 which is as below:
"salary or wage" means all remuneration (other than remuneration in respect of overtime work) capable of being expressed in terms of money, which would, if the terms of employment, express or implied, were fulfilled, be payable to an employee in respect of his employment or of work done in such employment and includes dearness allowance (that is to say, all cash payments, by whatever name called, paid to an employee on account of a rise in the cost of living), but does not include—
(i) any other allowance which the employee is for the time being entitled to;
(ii) the value of any house accommodation or of supply of light, water, medical attendance or other amenity or of any service or of any concessional supply of food grains or other articles;
(iii) any travelling concession;
(iv) any bonus (including incentive, production and attendance bonus);
(v) any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the employee under any law for the time being in force;
(vi) any retrenchment compensation or any gratuity or other retirement benefit payable to the employee or any ex gratia payment made to him;
(vii) any commission payable to the employee. Explanation.--Where an employee is given in lieu of the whole or part of the salary or wage payable to him, free food allowance or free food by his employer, such food allowance or the value of such food shall, for the purpose of this clause, be deemed to form part of the salary or wage of such employee;
Thanks for your query.
Regds,
From India, Delhi
The answer is Basic + DA not the Gross amount .For clarification of the term Salary or Wages, I want to take you through Sec. 2 (21) of the Payment of Bonus Act, 1965 which is as below:
"salary or wage" means all remuneration (other than remuneration in respect of overtime work) capable of being expressed in terms of money, which would, if the terms of employment, express or implied, were fulfilled, be payable to an employee in respect of his employment or of work done in such employment and includes dearness allowance (that is to say, all cash payments, by whatever name called, paid to an employee on account of a rise in the cost of living), but does not include—
(i) any other allowance which the employee is for the time being entitled to;
(ii) the value of any house accommodation or of supply of light, water, medical attendance or other amenity or of any service or of any concessional supply of food grains or other articles;
(iii) any travelling concession;
(iv) any bonus (including incentive, production and attendance bonus);
(v) any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the employee under any law for the time being in force;
(vi) any retrenchment compensation or any gratuity or other retirement benefit payable to the employee or any ex gratia payment made to him;
(vii) any commission payable to the employee. Explanation.--Where an employee is given in lieu of the whole or part of the salary or wage payable to him, free food allowance or free food by his employer, such food allowance or the value of such food shall, for the purpose of this clause, be deemed to form part of the salary or wage of such employee;
Thanks for your query.
Regds,
From India, Delhi
Dear Mahesh,
As per Section 2(13) of payment of bonus act. 1965 The Basic plus DA should Not be Exceed the threshold limit i.e 21000/- if employee drawing basic plus DA exceeding 21000/- shall be excluded from the purview of bonus?
Thanks & Regards
V SHAKYA
HR & Labour, Corporate Laws Advisor
From India, Agra
As per Section 2(13) of payment of bonus act. 1965 The Basic plus DA should Not be Exceed the threshold limit i.e 21000/- if employee drawing basic plus DA exceeding 21000/- shall be excluded from the purview of bonus?
Thanks & Regards
V SHAKYA
HR & Labour, Corporate Laws Advisor
From India, Agra
Dear Sir,
As per Sec. 2 (21) of the Payment of Bonus Act, 1965 which is as below :-
"salary or wage" means all remuneration what does it means ?
Is it means we have to consider Gross salary (which include basic +HRA+Conveyance+Medical allowance+other/General allowance).
Kindly clarify this.
Regards,
Bala
9873350637
From India, Delhi
As per Sec. 2 (21) of the Payment of Bonus Act, 1965 which is as below :-
"salary or wage" means all remuneration what does it means ?
Is it means we have to consider Gross salary (which include basic +HRA+Conveyance+Medical allowance+other/General allowance).
Kindly clarify this.
Regards,
Bala
9873350637
From India, Delhi
Dear Sir,
As per Sec. 2 (21) of the Payment of Bonus Act, 1965 which is as below :-
"SALARY or wage" means all remuneration what does it means ?
Is it means we have to consider Gross salary (which include basic +HRA+Conveyance+Medical allowance+other/General allowance).
Kindly clarify this.
Regards,
From India, Rajkot
As per Sec. 2 (21) of the Payment of Bonus Act, 1965 which is as below :-
"SALARY or wage" means all remuneration what does it means ?
Is it means we have to consider Gross salary (which include basic +HRA+Conveyance+Medical allowance+other/General allowance).
Kindly clarify this.
Regards,
From India, Rajkot
The bonus is a reward that is paid to an employee for his work dedication towards the organization. The basic objective to give the bonus is to share the profit earned by the organization amongst the employees and staff members.
Payment of bonus act applicability
The payment of bonus act applies to the whole of India. The Provision of this act applies to the following factories /establishments/companies:-
The factory defined under clause section 2 of the factories act 1948.
Every establishment in which 20 or more persons employed on any day during an accounting year.
The act also applies to public sectors in some cases.
Part-time employees also included.
When is the employee eligible for the bonus?
Every employee drawing not less than Rs. 21,000/- per month and who has worked for not less than 30 days in an accounting year shall be eligible for the Bonus. Every employee will be entitled to be paid by his employer in an accounting year, bonus, in accordance with the provisions of this Act, provided he has worked in the establishment for not less than 30 working days in that year.
When an employee is not eligible for the statutory bonus but the company wants to share bonus, it can be given as ex-gratia
Minimum Bonus
Previously, the maximum bonus payable was 20% of Rs 3500 per month. The minimum bonus payment was capped at 8.33% of Rs 3500 per month or Rs 100, whichever is higher. The calculation ceiling of Rs 3500 is currently doubled to Rs 7000 per month “or the minimum wage for the scheduled employment, as fixed by the appropriate Government” (whichever is higher). Therefore, the cost associated with bonus payments could be double, based on the organization’s performance.
Calculation of Bonus as per Bonus Act (Amendment of 2015)
If the gross earning of your employees is below Rs.21000 you are eligible to pay bonus. Calculation of bonus will be as follows:
If Basic+DA is below Rs.7000 then bonus will be calculated on the actual amount.
If Basic+DA is above Rs.7000 then the bonus will be calculated on Rs.7000.
Examples of calculation of bonus
If the Basic salary of the employee is less than or equal to Rs 7,000
Rahul is working as an engineer in a Company in Bangalore. His basic salary is Rs. 6,500 per month.
Formula: Basic Salary*8.33% = Bonus per month
6500*8.33% = 541.45 (6497.4 per annum)
If the Basic salary of the employee is higher than Rs 7,000
Siddharth is working as a Sales office in one of the shops in Delhi. His basic salary is Rs. 18,000 per month.
Formula: Basic Salary*20% = Bonus per month
7,000*20% = 1400 per month
If the Basic salary of the employee is higher than Rs 21,000
There is no bonus applicable to employees having a basic salary of more than Rs 21,000.
From India
Payment of bonus act applicability
The payment of bonus act applies to the whole of India. The Provision of this act applies to the following factories /establishments/companies:-
The factory defined under clause section 2 of the factories act 1948.
Every establishment in which 20 or more persons employed on any day during an accounting year.
The act also applies to public sectors in some cases.
Part-time employees also included.
When is the employee eligible for the bonus?
Every employee drawing not less than Rs. 21,000/- per month and who has worked for not less than 30 days in an accounting year shall be eligible for the Bonus. Every employee will be entitled to be paid by his employer in an accounting year, bonus, in accordance with the provisions of this Act, provided he has worked in the establishment for not less than 30 working days in that year.
When an employee is not eligible for the statutory bonus but the company wants to share bonus, it can be given as ex-gratia
Minimum Bonus
Previously, the maximum bonus payable was 20% of Rs 3500 per month. The minimum bonus payment was capped at 8.33% of Rs 3500 per month or Rs 100, whichever is higher. The calculation ceiling of Rs 3500 is currently doubled to Rs 7000 per month “or the minimum wage for the scheduled employment, as fixed by the appropriate Government” (whichever is higher). Therefore, the cost associated with bonus payments could be double, based on the organization’s performance.
Calculation of Bonus as per Bonus Act (Amendment of 2015)
If the gross earning of your employees is below Rs.21000 you are eligible to pay bonus. Calculation of bonus will be as follows:
If Basic+DA is below Rs.7000 then bonus will be calculated on the actual amount.
If Basic+DA is above Rs.7000 then the bonus will be calculated on Rs.7000.
Examples of calculation of bonus
If the Basic salary of the employee is less than or equal to Rs 7,000
Rahul is working as an engineer in a Company in Bangalore. His basic salary is Rs. 6,500 per month.
Formula: Basic Salary*8.33% = Bonus per month
6500*8.33% = 541.45 (6497.4 per annum)
If the Basic salary of the employee is higher than Rs 7,000
Siddharth is working as a Sales office in one of the shops in Delhi. His basic salary is Rs. 18,000 per month.
Formula: Basic Salary*20% = Bonus per month
7,000*20% = 1400 per month
If the Basic salary of the employee is higher than Rs 21,000
There is no bonus applicable to employees having a basic salary of more than Rs 21,000.
From India
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Bonus eligibility.xls
Amendment to Payment of Bonus Act 2015.jpg
Bonus act amendment gazette copy.pdf