Dear Seniors,
One of our employee basic salary is 6000 PM and state minimum wages is 7345 however in the month of july employee had taken two leave therefore his earned basic was 5600 in july, pls let me know for the month of july wether to calculate bonus on 6000 or 7345 or 5600,
Regard
Amit
From India, Jaipur
5One of our employee basic salary is 6000 PM and state minimum wages is 7345 however in the month of july employee had taken two leave therefore his earned basic was 5600 in july, pls let me know for the month of july wether to calculate bonus on 6000 or 7345 or 5600,
Regard
Amit
From India, Jaipur
The bonus is computed on the total annual salary actually received by an employee during the financial year.
If the salary (basic + da) is more than ₹7000 or more than min wages, then you need to compute bonus on ₹7000 or min wages, whichever higher.
I hope you are not computing and paying bonus every month
From India, Mumbai
If the salary (basic + da) is more than ₹7000 or more than min wages, then you need to compute bonus on ₹7000 or min wages, whichever higher.
I hope you are not computing and paying bonus every month
From India, Mumbai
Amit,
As per the new amendment of payment of bonus act wage consideration seven thousand rupees or the minimum wage, whichever is higher. in your case minimum wage is higher so you can calculated on Rs 7345 as ceiling.divided by no of days in a month multiplied by day worked
Regards
Vishnu
From India, Bangalore
As per the new amendment of payment of bonus act wage consideration seven thousand rupees or the minimum wage, whichever is higher. in your case minimum wage is higher so you can calculated on Rs 7345 as ceiling.divided by no of days in a month multiplied by day worked
Regards
Vishnu
From India, Bangalore
Assuming you are mentioning Basic salary Rs. 6000/ , no DA/ VDA IS APPLICABLE IN your payment terms above.
Bonusable wages/ PFable wages rates should not be lower than notified rates ie Rs. 7345/ . Two days deduction means 7345/26 x2=Rs.565. So bonus to be calculated on Rs.7345-565=Rs.6780/.Also, please do correct min. wages rates, clarified here with examples for you.
Regds,
RDS Yadav
From India, Delhi
Bonusable wages/ PFable wages rates should not be lower than notified rates ie Rs. 7345/ . Two days deduction means 7345/26 x2=Rs.565. So bonus to be calculated on Rs.7345-565=Rs.6780/.Also, please do correct min. wages rates, clarified here with examples for you.
Regds,
RDS Yadav
From India, Delhi
Please read section 12 along with 10 and 11 of Bonus Act.The considering minimum wages is only when the wages of an employee is above Rs7000pm.If wages is Rs 6000 calculate bonus on 6000 only.If wage is 10000 and MW is 8000 calculate bonus on 8000.If MW is not fixed and wages is 20000 calculate bonus on 7000.
From India, Thiruvananthapuram
From India, Thiruvananthapuram
Dear Amit
Sec.12 after amendment in 2016 states that the salary/ wage limit for calculation of bonus is Rs.7000/- or minimum wages per month for the appropriate scheduled employment whichever is higher. Thus the basic of the employee (assuming that there is no DA payable) is Rs.6000/-p.m but after deducting two days leave in July, it became Rs.5600/-p.m. In any case, since the employee's salary or wage is not exceeding Rs.7000/- or the minimum wages i.e Rs.7345 p.m, the bonus has to be calculated on annual salary From April to March at the basic of Rs.6000/- including such reduced basic for July.I concur with Verghese Mathew.
B.Saikumar
From India, Mumbai
Sec.12 after amendment in 2016 states that the salary/ wage limit for calculation of bonus is Rs.7000/- or minimum wages per month for the appropriate scheduled employment whichever is higher. Thus the basic of the employee (assuming that there is no DA payable) is Rs.6000/-p.m but after deducting two days leave in July, it became Rs.5600/-p.m. In any case, since the employee's salary or wage is not exceeding Rs.7000/- or the minimum wages i.e Rs.7345 p.m, the bonus has to be calculated on annual salary From April to March at the basic of Rs.6000/- including such reduced basic for July.I concur with Verghese Mathew.
B.Saikumar
From India, Mumbai
Dear Amit,
Bonus contemplated under the Payment of Bonus Act,1965 is a one-time-annual payment determined on the basis of performance of the establishment, calculated and paid on the basis of the total earnings of every eligible employee in an accounting year. Here, total earnings would mean the annual sum total of the components comprising of the term " salary or wage" as defined u/s 2(21) of the Act. Therefore as rightly pointed out by Mr.SaswataBanerjee the question of monthly-based calculation does not arise in the case of statutory bonus. Even assuming that such an exercise is done for the sake of administrative or accounting convenience, such sum would be the interim bonus only mentioned u/s 17(b) of the Act and can be deducted from the annual bonus payable at the close of the accounting year.
As regards the point about the interpretation of sec.12 after the amendment put forth by Mr.Varghese Mathew and concurred with by Mr.Saikumar, I beg to differ on the basis of the following reasoning:
(1) The object of the rise in the threshold wages from the existing Rs.10000/= to Rs.21000/= in the Amending Act is to bring more no of employees within the purview of the Act and make them eligible for bonus in consideration of the prevailing economic situation of the country.
(2) The simultaneous amendment to sec.12 of the Act raising the entitlement of employees to bonus from the existing Rs.3500/= to Rs.7000/= under reference to the minimum wages fixed under the Minimum Wages Act,1948 with a " WHICHEVER IS HIGHER " conditional clause is to ensure more amount of bonus to the lowly paid employees as well as to enhanced bonus to employees with higher income.
Let me explain my point with illustrations:-
(a)IN THE CASE OF EMPLOYEES UNDER SCHEDULED EMPLOYMENTS FOR WHICH MINIMUM WAGES ARE FIXED:
The actual monthly wage of an employee for the purpose of bonus is Rs.8000-00 against the minimum wages of Rs.7000-00
Here, bonus @ 8.33% or 20% has to be calculated on the basis of higher earnings of 96000-00(8000 x 12)only.
In case the monthly wages is only Rs.6000-00 against the minimum wages of Rs.7000-00
Here too, bonus has to be calculated on the higher earnings of Rs.84000-00( 7000 x 12 )only.
The rationale is that the lowly-paid employee should get higher bonus on the basis of higher wages.
(b)IN THE CASE OF EMPLOYEES BEYOND THE PURVIEW OF THE MINIMUM WAGES act,1948:
The actual monthly salary for the purpose of bonus is Rs10000-00
Here bonus has to be calculated on the basis of the monthly notional wages of Rs.7000-00 only.
The rationale is that but for the amendments of sections 2(13) and 12, he would be entitled only to a lesser bonus on the lesser notional limit.
(3) The conditional clause of whichever higher with reference to minimum wages need not be applied to employees who are beyond the purview of the Minimum Wages Act.
From India, Salem
Bonus contemplated under the Payment of Bonus Act,1965 is a one-time-annual payment determined on the basis of performance of the establishment, calculated and paid on the basis of the total earnings of every eligible employee in an accounting year. Here, total earnings would mean the annual sum total of the components comprising of the term " salary or wage" as defined u/s 2(21) of the Act. Therefore as rightly pointed out by Mr.SaswataBanerjee the question of monthly-based calculation does not arise in the case of statutory bonus. Even assuming that such an exercise is done for the sake of administrative or accounting convenience, such sum would be the interim bonus only mentioned u/s 17(b) of the Act and can be deducted from the annual bonus payable at the close of the accounting year.
As regards the point about the interpretation of sec.12 after the amendment put forth by Mr.Varghese Mathew and concurred with by Mr.Saikumar, I beg to differ on the basis of the following reasoning:
(1) The object of the rise in the threshold wages from the existing Rs.10000/= to Rs.21000/= in the Amending Act is to bring more no of employees within the purview of the Act and make them eligible for bonus in consideration of the prevailing economic situation of the country.
(2) The simultaneous amendment to sec.12 of the Act raising the entitlement of employees to bonus from the existing Rs.3500/= to Rs.7000/= under reference to the minimum wages fixed under the Minimum Wages Act,1948 with a " WHICHEVER IS HIGHER " conditional clause is to ensure more amount of bonus to the lowly paid employees as well as to enhanced bonus to employees with higher income.
Let me explain my point with illustrations:-
(a)IN THE CASE OF EMPLOYEES UNDER SCHEDULED EMPLOYMENTS FOR WHICH MINIMUM WAGES ARE FIXED:
The actual monthly wage of an employee for the purpose of bonus is Rs.8000-00 against the minimum wages of Rs.7000-00
Here, bonus @ 8.33% or 20% has to be calculated on the basis of higher earnings of 96000-00(8000 x 12)only.
In case the monthly wages is only Rs.6000-00 against the minimum wages of Rs.7000-00
Here too, bonus has to be calculated on the higher earnings of Rs.84000-00( 7000 x 12 )only.
The rationale is that the lowly-paid employee should get higher bonus on the basis of higher wages.
(b)IN THE CASE OF EMPLOYEES BEYOND THE PURVIEW OF THE MINIMUM WAGES act,1948:
The actual monthly salary for the purpose of bonus is Rs10000-00
Here bonus has to be calculated on the basis of the monthly notional wages of Rs.7000-00 only.
The rationale is that but for the amendments of sections 2(13) and 12, he would be entitled only to a lesser bonus on the lesser notional limit.
(3) The conditional clause of whichever higher with reference to minimum wages need not be applied to employees who are beyond the purview of the Minimum Wages Act.
From India, Salem
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Bonus Calculation.xls
BONUS CALCULATION RULE (1).pdf