Our company is an electronic manufacturing unit in Palakkad, Kerala. Today, I heard from the District Labour Officer that the bonus is to be calculated based on the minimum wages. I would like to know what the new minimum wages are for employees in our industry (unskilled labor). For minimum bonus calculation, Bonus = (MinWage + VDA) 8.33/100 * 12. Is this formula correct? Kindly confirm.
From India, Palakkad
From India, Palakkad
Dear Shahjahan,
The question of computation of bonus under the PB Act,1965 based on the minimum wage rates arises only when your industry wages fall less than the statutory minimum wages. Similarly, the notional limit on wages for the purpose of calculation of bonus comes into play only in respect of employees whose monthly wages are Rs.7000/- or more. In such cases, bonus should be calculated only as if the monthly wages are Rs.7000/-. If the minimum wages payable to such employees is more than Rs.7000/-, then the actual minimum wages should be the basis for the calculation. In the case of minimum wages or industry wages comprising of several components, only those components included in the definition of wages / salary under the Payment of Bonus Açt,1965 should be taken into account for the calculation of bonus under the Act.
From India, Salem
6108The question of computation of bonus under the PB Act,1965 based on the minimum wage rates arises only when your industry wages fall less than the statutory minimum wages. Similarly, the notional limit on wages for the purpose of calculation of bonus comes into play only in respect of employees whose monthly wages are Rs.7000/- or more. In such cases, bonus should be calculated only as if the monthly wages are Rs.7000/-. If the minimum wages payable to such employees is more than Rs.7000/-, then the actual minimum wages should be the basis for the calculation. In the case of minimum wages or industry wages comprising of several components, only those components included in the definition of wages / salary under the Payment of Bonus Açt,1965 should be taken into account for the calculation of bonus under the Act.
From India, Salem
Thank you very much for the reply, sir.
We paid a bonus in 2015-16 with a Basic of 5240 + VDA avg(12 months) = 3344, totaling 8584, along with 8.33% of the same. In 2016-17, we paid a Basic of 5240 + VDA avg(12 months) = 3658, amounting to 8898, and 8.33% of the same.
As we move into 2017-18, we are planning to have a Basic of 5240 + VDA avg and 8.33% of the same. Are there any mistakes in our calculations? Has there been any change in the Basic 5240 amount?
From India, Palakkad
We paid a bonus in 2015-16 with a Basic of 5240 + VDA avg(12 months) = 3344, totaling 8584, along with 8.33% of the same. In 2016-17, we paid a Basic of 5240 + VDA avg(12 months) = 3658, amounting to 8898, and 8.33% of the same.
As we move into 2017-18, we are planning to have a Basic of 5240 + VDA avg and 8.33% of the same. Are there any mistakes in our calculations? Has there been any change in the Basic 5240 amount?
From India, Palakkad
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