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Please find the Bonus computation template for year 2016-17. Regards, Amit
From India, Surat
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From India, Surat
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Dear Friend Amit,
Thank you for the file, but you have calculated the minimum amount as Rs 7000. It should be calculated between Rs 7000 or the minimum grade, whichever is higher. As the minimum grade is higher, please review. If I am mistaken, kindly correct me.
Thanks
From India, New Delhi
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Thank you for the file, but you have calculated the minimum amount as Rs 7000. It should be calculated between Rs 7000 or the minimum grade, whichever is higher. As the minimum grade is higher, please review. If I am mistaken, kindly correct me.
Thanks
From India, New Delhi
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(Fact Checked)-The bonus calculation should be based on the higher of Rs 7000 or the minimum grade. Your clarification is accurate. Thank you for highlighting this detail. (1 Acknowledge point)
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If 8.33% of eligible salary exceeds Rs.7000 per year, then the statutory bonus limited to Rs.7000 or Rs.583 per month. Please read the bonus applicability.
From India, Surat
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From India, Surat
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(Fact Check Failed/Partial)-The statutory bonus limit is not fixed at Rs. 7000 or Rs. 583. The Payment of Bonus Act, 1965, states 8.33% of the salary or wage earned by an employee during the accounting year. The monthly bonus is capped at 20% of the salary. Please refer to the Payment of Bonus Act, 1965 for detailed calculations.
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Dear Amit Aishwarys,
Your statement that Statutory Bonus limited to Rs7,000/- is not correct. Please read the act once again.
Bonus at the rate of 8.33% for wages up to Rs7,000/- will be Rs7,000. Bonus at the rate of 8.33% for wages up to Rs10,000 will be Rs10,000/-.
From India, New Delhi
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Your statement that Statutory Bonus limited to Rs7,000/- is not correct. Please read the act once again.
Bonus at the rate of 8.33% for wages up to Rs7,000/- will be Rs7,000. Bonus at the rate of 8.33% for wages up to Rs10,000 will be Rs10,000/-.
From India, New Delhi
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(Fact Check Failed/Partial)-The user reply is incorrect. As per the Payment of Bonus Act, 1965, the statutory bonus ceiling is Rs. 7,000, not Rs. 10,000.
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Dear Srinath Ji,
Have you ever thought about what the capping amount of the bonus is? If not, then please refer to the description given below:
For the payout of the bonus, the capping is at Rs 7000/-. Every employee should receive a minimum of 8.33% of wages capped at Rs 7,000/- even if there is a loss and a maximum of 20% of wages capped at Rs 7,000/- in an accounting year. Many companies follow the practice of paying bonuses on a monthly basis; some pay a minimum of 8.33% of Rs 7,000, i.e., Rs 583/-, or some 20% of Rs 7,000/-, i.e., Rs 1,400/- per month.
Capping of Rs 7000/- means that even if an employee falls under the bonus category (Basic salary is less than or equal to Rs 21,000), he will be paid a bonus on a maximum of Rs 7,000/-. Employers can calculate the bonus on the capping amount.
For example, if an employee's basic salary is Rs 12,000 (where we will consider only Rs 7,000 as a bonus salary) and he works for 12 months in a financial year, then the bonus amount he will receive in that year will be calculated as follows:
Bonus Calculation = (Basic Salary + DA) x Number Of Months Worked x 8.33%
= 7000 x 12 x 8.33% = Rs. 6997
I understand that as per The Bonus Amendment Act '2015 - An employee who is drawing a salary or wages between Rs 7000/- per month and Rs 21,000/- per month, the bonus payable to him is to be calculated on Rs 7000 or whichever is higher. However, it depends on the company policy. I am not saying that your statement is wrong, but my statement is also not wrong.
Please refer to the attachment.
Regards,
Amit
From India, Surat
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Have you ever thought about what the capping amount of the bonus is? If not, then please refer to the description given below:
For the payout of the bonus, the capping is at Rs 7000/-. Every employee should receive a minimum of 8.33% of wages capped at Rs 7,000/- even if there is a loss and a maximum of 20% of wages capped at Rs 7,000/- in an accounting year. Many companies follow the practice of paying bonuses on a monthly basis; some pay a minimum of 8.33% of Rs 7,000, i.e., Rs 583/-, or some 20% of Rs 7,000/-, i.e., Rs 1,400/- per month.
Capping of Rs 7000/- means that even if an employee falls under the bonus category (Basic salary is less than or equal to Rs 21,000), he will be paid a bonus on a maximum of Rs 7,000/-. Employers can calculate the bonus on the capping amount.
For example, if an employee's basic salary is Rs 12,000 (where we will consider only Rs 7,000 as a bonus salary) and he works for 12 months in a financial year, then the bonus amount he will receive in that year will be calculated as follows:
Bonus Calculation = (Basic Salary + DA) x Number Of Months Worked x 8.33%
= 7000 x 12 x 8.33% = Rs. 6997
I understand that as per The Bonus Amendment Act '2015 - An employee who is drawing a salary or wages between Rs 7000/- per month and Rs 21,000/- per month, the bonus payable to him is to be calculated on Rs 7000 or whichever is higher. However, it depends on the company policy. I am not saying that your statement is wrong, but my statement is also not wrong.
Please refer to the attachment.
Regards,
Amit
From India, Surat
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(Fact Checked)-The response provided is accurate and detailed. It covers the capping of bonus, calculation methodology, and the impact of the Bonus Amendment Act of 2015. Well done! (1 Acknowledge point)
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Dear All,
If you read the Bonus Act (Amended), there is a very clear rule:
Eligibility if Basic <= 21,000/-
The maximum limit of the bonus is Rs. 7,000/- or minimum wages, whichever is more.
Suppose the Basic + DA is Rs. 6,000/- per month, then the bonus will be Rs. 7,000/- Statutory.
If Basic + DA is Rs. 10,000/- per month, then the bonus will be equal to the minimum wages or Rs. 7,000/-, whichever is more.
If Basic + DA is more than Rs. 21,000/-, then there is no bonus eligibility.
From India, Indore
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If you read the Bonus Act (Amended), there is a very clear rule:
Eligibility if Basic <= 21,000/-
The maximum limit of the bonus is Rs. 7,000/- or minimum wages, whichever is more.
Suppose the Basic + DA is Rs. 6,000/- per month, then the bonus will be Rs. 7,000/- Statutory.
If Basic + DA is Rs. 10,000/- per month, then the bonus will be equal to the minimum wages or Rs. 7,000/-, whichever is more.
If Basic + DA is more than Rs. 21,000/-, then there is no bonus eligibility.
From India, Indore
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(Fact Check Failed/Partial)-The information provided in the user reply is partially correct. While the calculation method for bonus based on Basic & DA is accurate, the maximum bonus limit is subject to change as per amendments. The latest amendment states the maximum bonus limit at Rs. 21,000. It's essential to stay updated with the latest regulations. Thank you for sharing your understanding.
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Dear Mr. Amit,
Please note that your statement, "But it depends on Company policy," does not apply to statutory matters. Your company policy should be in conformity with statutory requirements, i.e., The Payment of Bonus Act, 1965. The calculation of bonus should be based on Rs 7,000/- or the applicable minimum wages, whichever is higher, for the financial year 2016-17.
You may check the applicable minimum wages for the FY 2016-17, where you will find that the minimum wage is more than Rs 7,000/-. I hope this clarification is sufficient. When discussing statutory matters, company policy should not be mixed up. If the company policy is less than the statutory requirement, the law will prevail over the policy.
From India, New Delhi
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Please note that your statement, "But it depends on Company policy," does not apply to statutory matters. Your company policy should be in conformity with statutory requirements, i.e., The Payment of Bonus Act, 1965. The calculation of bonus should be based on Rs 7,000/- or the applicable minimum wages, whichever is higher, for the financial year 2016-17.
You may check the applicable minimum wages for the FY 2016-17, where you will find that the minimum wage is more than Rs 7,000/-. I hope this clarification is sufficient. When discussing statutory matters, company policy should not be mixed up. If the company policy is less than the statutory requirement, the law will prevail over the policy.
From India, New Delhi
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(Fact Checked)-The user's reply is correct. It accurately states that when it comes to statutory matters like bonus calculation, company policies should align with statutory requirements such as The Payment of Bonus Act, 1965. Minimum wages or Rs7,000/- (whichever is higher) should be considered for bonus calculation. (1 Acknowledge point)
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Dear Mr. Mishra,
It would be really helpful if you could share the exact clause in the act where it is mentioned that an employee is eligible for bonus payment when his basic + dearness allowance is less than 21,000. I have understood the bonus act in a different way, which I am sharing below. If you can correct me, it would be really helpful.
According to me, the bonus eligibility is calculated on the basis of earnings other than a few allowances of the same category such as overtime allowance, incentives, etc. However, the payment of bonus is based on basic + dearness allowance only. For bonus calculation, only basic and dearness allowance would be required.
Please help me understand the same better by quoting the clause in the bonus act where it is mentioned that an employee whose basic + dearness allowance is less than 21K should be paid bonus as per the statutory norms.
Thanks in advance.
Syam
From India, Bengaluru
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It would be really helpful if you could share the exact clause in the act where it is mentioned that an employee is eligible for bonus payment when his basic + dearness allowance is less than 21,000. I have understood the bonus act in a different way, which I am sharing below. If you can correct me, it would be really helpful.
According to me, the bonus eligibility is calculated on the basis of earnings other than a few allowances of the same category such as overtime allowance, incentives, etc. However, the payment of bonus is based on basic + dearness allowance only. For bonus calculation, only basic and dearness allowance would be required.
Please help me understand the same better by quoting the clause in the bonus act where it is mentioned that an employee whose basic + dearness allowance is less than 21K should be paid bonus as per the statutory norms.
Thanks in advance.
Syam
From India, Bengaluru
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(Fact Check Failed/Partial)-The employee is eligible for bonus payment when his basic + dearness allowance is less than 21,000 as per the Payment of Bonus Act, 1965. The Act does not exclude any specific allowances for bonus calculation.
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Statutory Bonus workings with Minimum wages excel template
From India, Hyderabad
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From India, Hyderabad
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(Fact Check Failed/Partial)-The user reply is incorrect. The request was for a bonus calculation sheet, not a template for statutory bonus workings with minimum wages. Please provide the bonus calculation sheet as requested.
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(Fact Check Failed/Partial)-The user's reply does not fulfill the request for a bonus calculation sheet for the year 2016-17. Kindly ensure to provide the correct document as requested. Thank you for your cooperation.