Hello HR Experts, I was associated with one of the growing FMCG Companies, where we got one full salary at the time of Diwali entitled as a "Diwali bonus' but the bonus act says that "Bonus is calculated 8.33% Of BASIC +DA." Now, My question is, what is the standard bonus calculation for the additive Company?
From India, Ahmedabad
From India, Ahmedabad
Dear,
Bonus is given by companies as per Bonus Act, 1965. Bonus calculation is minimum 8.33% to maximum 20% as per allocable surplus of the company.
Three steps of Bonus Calculations:
1. As per act eligibility of Bonus is only if any employee getting Basic Salary + DA up to Rs. 21,000/-
2. Ceiling of Bonus is Rs. 7,000/-
3. If any state minimum wage is Rs. X/- then Bonus should be at least Rs. 7,000/- or Rs. X/- whichever is higher.
Generally Bonus is paid after 8 months of closing of Financial Year it is approximately near "Deepawali" so, some times this bonus is called "Diwali Bonus" but actually it is "Statutory Bonus" because if someone candidate left job before Diwali. H should be awarded with his/her Bonus in full n final settlement.
From India, Mohali
Bonus is given by companies as per Bonus Act, 1965. Bonus calculation is minimum 8.33% to maximum 20% as per allocable surplus of the company.
Three steps of Bonus Calculations:
1. As per act eligibility of Bonus is only if any employee getting Basic Salary + DA up to Rs. 21,000/-
2. Ceiling of Bonus is Rs. 7,000/-
3. If any state minimum wage is Rs. X/- then Bonus should be at least Rs. 7,000/- or Rs. X/- whichever is higher.
Generally Bonus is paid after 8 months of closing of Financial Year it is approximately near "Deepawali" so, some times this bonus is called "Diwali Bonus" but actually it is "Statutory Bonus" because if someone candidate left job before Diwali. H should be awarded with his/her Bonus in full n final settlement.
From India, Mohali
What Mr, Neeraj -Kumar 1 explained, I would like to add that if the organization has been paid bonus at the time of Diwali as 'Diwali bonus' ignoring calculation as per statutory guide line instead full month gross salary is known as customary bonus.
There is no harm of paying more bonus. But it will be better if the Bonus portion is paid as per PB Act and the extra portion as ex-gratia , legally it will be strong footings.
S K Bandyopadhyay ( WB, Howrah )
CEO-USD HR Solutions
+91 98310 81531
skb@usdhrs.in
www.usdhrs.in
From India, New Delhi
334There is no harm of paying more bonus. But it will be better if the Bonus portion is paid as per PB Act and the extra portion as ex-gratia , legally it will be strong footings.
S K Bandyopadhyay ( WB, Howrah )
CEO-USD HR Solutions
+91 98310 81531
skb@usdhrs.in
www.usdhrs.in
From India, New Delhi
Dear Amisha
Bonus under the act is payable on basic+DA.
8.33% actually is 1/12, which is a month's salary.
If you are getting a full months' salary, it is probably more than what they are required to give under the law.
Further, if your salary is above ₹ 21000, you are not eligible for bonus
And also, if your salary is above minimum wages, you will get bonus on min wages only (the rule says 7000 per month or minimum wages, whichever higher, but now minimum wages in the country is higher than 7000 anyway)
At the same time, if the company's profit is high, you may be eligible for 20% of annual basic + da as bonus (which is 2.5 months salary, but with the restriction explained above)
As for paying at Diwali, Bonus is payable within 8 months from end of the financial year, which is mostly when Diwali is, so again, few people bother to dispute that part.
I hope this (and the details posted by other members) has clarified that you are most probably not at a loss as compared to what the rules provide
From India, Mumbai
Bonus under the act is payable on basic+DA.
8.33% actually is 1/12, which is a month's salary.
If you are getting a full months' salary, it is probably more than what they are required to give under the law.
Further, if your salary is above ₹ 21000, you are not eligible for bonus
And also, if your salary is above minimum wages, you will get bonus on min wages only (the rule says 7000 per month or minimum wages, whichever higher, but now minimum wages in the country is higher than 7000 anyway)
At the same time, if the company's profit is high, you may be eligible for 20% of annual basic + da as bonus (which is 2.5 months salary, but with the restriction explained above)
As for paying at Diwali, Bonus is payable within 8 months from end of the financial year, which is mostly when Diwali is, so again, few people bother to dispute that part.
I hope this (and the details posted by other members) has clarified that you are most probably not at a loss as compared to what the rules provide
From India, Mumbai
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Bonus Calculation.xls
BONUS CALCULATION RULE (1).pdf