Bonus Act Issue - Xls Download

Dear All,

I want to know if the bonus limit is 3500 Rs. (Basic + DA), and if any employee works in our organization with attendance of 18 days but their basic + DA is more than 3500 Rs., how do we calculate the bonus? Do we calculate based on the number of days (i.e., if 3500 Rs. is for 30 days, how much for 18 days...) or do we calculate based on the limit? Please advise as soon as possible.

Regards,
Mahesh

Dear Mahesh,

There have been recent amendments in the Bonus Act 1965. According to the amendments, The Payment of Bonus Bill (2010) stipulates that the minimum bonus, which is 8.33%, shall be based on the maximum salary or wage of Rs. 3500. The existing provisions are deemed inadequate given the current scenario of rising inflation.

The calculation ceiling for bonus has been increased from Rs. 3500 to Rs. 5000, and the minimum bonus payable has been enhanced from 8.33% to 11% of the salary or wage earned by the employee during the financial year for which the bonus is being paid.

An employee who has completed 30 days (i.e. if Date of Joining is on or before 2nd March '10) in any Accounting Year (2009-10) is eligible for a bonus. Bonus calculations for such cases should adhere to the ceiling of the minimum bonus Basic+DA limit not exceeding 1.20 pa.

Regards,
Dinesh

Hi,

Could you please tell me when we have to submit the bonus return? If it is for the financial year, then why do companies submit it after September?

Dear Ready,

We have to submit the bonus annual returns on or before December 30th. Additionally, bonuses must be paid within eight months after the completion of the financial year. Therefore, we need to ensure that the returns are submitted by December.

Regards,
Mahesh

As per the Payment of Bonus Act & Rule 1965, every employer has to submit the annual return in Form D within 30 days from the end of that particular accounting year. The accounting year runs from April to March.

Dear Dinesh,

I have some queries. I think the bill for Bonus Amendment 2010 is being considered in parliament, but it has not yet received approval from the ministry. It is currently under consideration. After approval, the act will be amended accordingly, and only then will it become effective with the declared date. As of now, it has not been declared.

If I am mistaken, please correct me.

Regards,
Atul

The coverage of an employee under the Payment of Bonus Act is Rs 10,000/- (Basic + DA). This means that those receiving Basic + DA < Rs 10,000/- shall be eligible for bonus payment. The calculation is always based on the actual Basic + DA, or if Basic + DA exceeds Rs 3500/-, the calculation will still be based on Rs 3500/-, i.e., 8.33% of Rs 3500/-.

In response to your question, if an employee has worked for 18 days in a particular month with a loss of pay for 12 days, receiving 18 days' salary, if this 18-day salary exceeds Rs 3500/-, in this case, it will be calculated on 3500/-. However, if the 18-day salary is less, then it will be based on the actual salary.

I hope this explanation satisfies your query.

Dear Mahesh,

The Bonus Amendment Act 2010, enhancing coverage limit to Rs. 15,000, payment limit to Rs. 5,000, and minimum to 11%, has not been enacted yet. As per the existing norms, the ceiling salary limit for bonus payment is Rs. 3,500. If an employee does not have full attendance, the bonus can be calculated on a pro-rata basis. For example, if someone has 6 months of attendance and is eligible for the minimum bonus, then 3,500 x 6/12 = 1,750 should be paid.

However, in a financial year, a minimum of 30 days attendance is required for statutory eligibility.

Abbas.P.S

Hi, my name is Rao.

I have a minor doubt - is the Bonus Act applicable all over India, or do we have separate acts for each state? Could you clarify this for me?

Regards,
Rao

Dear Professionals,

We don't encourage spoon-feeding. However, since these are days of bonuses and related issues, this time you are being assisted. Please read the Payment of Bonus Act, 1965. Under the title "Qualification for Bonus," it states that a worker is entitled to a bonus provided they have worked for at least 30 days during the relevant accounting year. Hence, in this case, they are not entitled to receive a bonus.