Lets accept this fact that whoever made this amendment was M*&F*&#. Entire Fraternity is banging head on wall after this amendment and everyone is coming up with a new translation
From India, Delhi
From India, Delhi
Dear Muhammed Asif,
Your query how to calculate bonus in this scenarios.
1. Gross salary is 25000/- and Basic+DA = 14000
Answer: He is eligible for Bonus on Basic+DA i.e. on Rs.14,000/-
2. Gross Salary Rs.50000 and Basic Salary Rs.25000
Answer: He is not eligible for Bonus as Per Payment of Bonus Act as his Basic salary is >Rs.25K.
However, your Company can pay him ex-gratia. No law will stop you paying ex-gratia.
Regards,
Suresh
From India, Thane
246Your query how to calculate bonus in this scenarios.
1. Gross salary is 25000/- and Basic+DA = 14000
Answer: He is eligible for Bonus on Basic+DA i.e. on Rs.14,000/-
2. Gross Salary Rs.50000 and Basic Salary Rs.25000
Answer: He is not eligible for Bonus as Per Payment of Bonus Act as his Basic salary is >Rs.25K.
However, your Company can pay him ex-gratia. No law will stop you paying ex-gratia.
Regards,
Suresh
From India, Thane
I have two clarifications to seek
1. What are the implication of paying statutory bonus as part of CTC...I have read a few comments but differing viewpoints do not provide any clear answers. Is there any government agency or labor dept who could clarify this once and for all. It's understood that if Bonus is allowed to be treated as one component of salary, it will be taken into account for Prof Tax and ESI contribution.
2. Once the allocable surplus is known from CA certificate, how is bonus payout (%) determined within the Min and Max allowed.
From India, Delhi
1. What are the implication of paying statutory bonus as part of CTC...I have read a few comments but differing viewpoints do not provide any clear answers. Is there any government agency or labor dept who could clarify this once and for all. It's understood that if Bonus is allowed to be treated as one component of salary, it will be taken into account for Prof Tax and ESI contribution.
2. Once the allocable surplus is known from CA certificate, how is bonus payout (%) determined within the Min and Max allowed.
From India, Delhi
Dear friend from Delhi,
Let me try to answer your queries though the first one relating to the legal effect of C.T.C on the compensation clause of an employment contract entered either implicitly or explicitly between the parties to the contract has already been discussed in this forum several times. What is the most unfortunate is the lack of cross reference whenever a question on C.T.C is raised afresh. In my own opinion, the divergence of the view points emerges only from the interpretation of the C.T.C as a concept . "Cost to the Company per employee" or CTC is an estimation of the over all expenditure incurred by the employer per year . This over all expenditure carries within its fold the gross wages or salary periodically paid, the fringe benefits of employment both statutory and non statutory, the cost of training if any for the purpose of updation of employment skills etc. Thus, C.T.C is an accounting tool of economic reality projecting the cost of labor/services rendered by the employee and payable periodically as well as the cost of retention of labor/employees incurred actually. Therefore, just because certain economic benefits or the the value of such benefits which can be computed in terms of money mentioned under the head C.T.C in an offer letter by the employer can not be claimed,ipso facto, by the employee unless otherwise the statutory conditions associated with such benefits are ripe on the date of such a claim. Statutory Bonus paid annually does not form part of the term wages as define u/s 2(22) of the ESIAct,1948. One has to understand the fact that the inclusion or exclusion of any item of payment to the employee in the term wage or salary depends upon the purpose of the particular Legislation only.
For your second query, I would request you to go through the provisions of Sec.15 of the Act.
From India, Salem
Let me try to answer your queries though the first one relating to the legal effect of C.T.C on the compensation clause of an employment contract entered either implicitly or explicitly between the parties to the contract has already been discussed in this forum several times. What is the most unfortunate is the lack of cross reference whenever a question on C.T.C is raised afresh. In my own opinion, the divergence of the view points emerges only from the interpretation of the C.T.C as a concept . "Cost to the Company per employee" or CTC is an estimation of the over all expenditure incurred by the employer per year . This over all expenditure carries within its fold the gross wages or salary periodically paid, the fringe benefits of employment both statutory and non statutory, the cost of training if any for the purpose of updation of employment skills etc. Thus, C.T.C is an accounting tool of economic reality projecting the cost of labor/services rendered by the employee and payable periodically as well as the cost of retention of labor/employees incurred actually. Therefore, just because certain economic benefits or the the value of such benefits which can be computed in terms of money mentioned under the head C.T.C in an offer letter by the employer can not be claimed,ipso facto, by the employee unless otherwise the statutory conditions associated with such benefits are ripe on the date of such a claim. Statutory Bonus paid annually does not form part of the term wages as define u/s 2(22) of the ESIAct,1948. One has to understand the fact that the inclusion or exclusion of any item of payment to the employee in the term wage or salary depends upon the purpose of the particular Legislation only.
For your second query, I would request you to go through the provisions of Sec.15 of the Act.
From India, Salem
Sir,
as per my knowledge the bonus eligibility is 21,000/- minimum % is from 8% to 20%
Slab will be 7,000/-
if Basic wage above 7000/- can be considered 7,000/- only. Formula is [ 7000* (% proposed by the company)*12 months]
if Basic wage is below 7000/- can be considered earned basic/- Formula is [Earned basic* (% proposed by the company)*12 months]
Correct me if i am wrong.
Best Regards
D.Nagaraju
From India, Hyderabad
as per my knowledge the bonus eligibility is 21,000/- minimum % is from 8% to 20%
Slab will be 7,000/-
if Basic wage above 7000/- can be considered 7,000/- only. Formula is [ 7000* (% proposed by the company)*12 months]
if Basic wage is below 7000/- can be considered earned basic/- Formula is [Earned basic* (% proposed by the company)*12 months]
Correct me if i am wrong.
Best Regards
D.Nagaraju
From India, Hyderabad
Dear Nagaraju,
The notional amount of Rs.7000/= should be taken into a/c only when the salary is more than 7000/=pm. When it falls below Rs.7000/=, the actual amount should be taken for the purpose of bonus payable under the Act. So your presumption is correct.
However, calculation would be different if the employment is covered by the Minimum Wages Act,1948 AND the minimum wages fixed is more than Rs.7000/= pm.
From India, Salem
The notional amount of Rs.7000/= should be taken into a/c only when the salary is more than 7000/=pm. When it falls below Rs.7000/=, the actual amount should be taken for the purpose of bonus payable under the Act. So your presumption is correct.
However, calculation would be different if the employment is covered by the Minimum Wages Act,1948 AND the minimum wages fixed is more than Rs.7000/= pm.
From India, Salem
Dear Nagaraju,
The Minimum Wages in Hyderabad (Telangana) for unskilled category is Rs.8768.80 & Rs.8438.80 for Zone I & II respectively upto 30.09.2018.
Similarly The Minimum Wages in Andhra Pradesh for unskilled category is Rs.8404 & Rs.8074 for Zone I & II respectively which is more than Rs.7,000 that means as per (Amended 2015) Payment of Bonus Act, you are required to pay Bonus as per payment of Minimum Wages (which is >7000).
In Delhi the MW is Rs.10,374 for unskilled category w.e.f 1st October, 2018.
Now for the calculation purpose the salary/wage limit is enhanced from Rs.3,500 to Rs.7,000 and the eligibility for Bonus coverage from Rs.10K to Rs.21K.
As per amended Bonus Act it is mentioned to pay Minimum Bonus Amount of Rs.7,000 or as per the MW, whichever is higher.
According to me there is no clarity whether the employees drawing salary wages <Rs.7,000 would get bonus on lesser amount or Rs.7000. Moreover, now the MW for unskilled category is >Rs.7,000/- per month almost in all States in India so they will get Bonus >Rs.7000 @8.3333%.
Regards,
Suresh
From India, Thane
The Minimum Wages in Hyderabad (Telangana) for unskilled category is Rs.8768.80 & Rs.8438.80 for Zone I & II respectively upto 30.09.2018.
Similarly The Minimum Wages in Andhra Pradesh for unskilled category is Rs.8404 & Rs.8074 for Zone I & II respectively which is more than Rs.7,000 that means as per (Amended 2015) Payment of Bonus Act, you are required to pay Bonus as per payment of Minimum Wages (which is >7000).
In Delhi the MW is Rs.10,374 for unskilled category w.e.f 1st October, 2018.
Now for the calculation purpose the salary/wage limit is enhanced from Rs.3,500 to Rs.7,000 and the eligibility for Bonus coverage from Rs.10K to Rs.21K.
As per amended Bonus Act it is mentioned to pay Minimum Bonus Amount of Rs.7,000 or as per the MW, whichever is higher.
According to me there is no clarity whether the employees drawing salary wages <Rs.7,000 would get bonus on lesser amount or Rs.7000. Moreover, now the MW for unskilled category is >Rs.7,000/- per month almost in all States in India so they will get Bonus >Rs.7000 @8.3333%.
Regards,
Suresh
From India, Thane
Dear suresh garu and Umakanth garu
Thanks for the valuable information.
the bonus calculation can be consider the minimum wage if it is more than 7,000/- as [MW*(% proposed by the company)*12 months] is it right ?....
Thanking you for the clarification.
Best Regards
D.Nagaraju
From India, Hyderabad
Thanks for the valuable information.
the bonus calculation can be consider the minimum wage if it is more than 7,000/- as [MW*(% proposed by the company)*12 months] is it right ?....
Thanking you for the clarification.
Best Regards
D.Nagaraju
From India, Hyderabad
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Bonus Calculation.xls
BONUS CALCULATION RULE (1).pdf