FAQ on Payment of Bonus Act

Payment of Bonus Act, 1965

To whom Payment of Bonus Act, 1965 is applicable? Bonus Act is applicable to the factories and establishment where 20 or more workmen are engaged For what period bonus is calculated? Bonus is calculated for Accounting Year that is from April to March What is salary limit  to recieve bonus as per Payment of Bonsu Act, 1965? And how much time should one work in an year to recieve bonus? An employees is eleigibe to recieve Bonus  on the following conditions (1) when he earns wages less than Rs 10000 per month (2) he works for atleast 30 working days in year. What components of salary are required to be considered for calculating bonus? Bonus is calculate on Basic , Dearness Allowance, Any value of food concesssion (it means any allowance given for food, or cost of the meal) How Gross Profit is calculated under payment of Bonus Act? Gross profits of a Non Banking Company are calculated as per schedule I, and for any other Company as per schedue-II What is available surplus?. Availble surplus is calculated (for calculating allocable surplus)  from the gross profit .  Avaiable Surplus= Gross Profits -(Depreciation+Development Rebate+Direct Tax+Items specified in Schedule:3*) You can  know the items specified in schedule 3 at the following link Allocable surplus for Companies other than banking companies is 60 % of availble surplus The follwing table depicts calculation of available surplus of a  corporation. You can inpur the values in the text box and  get the result in the result area.                                           Calculate  Available Surplus 1 Gross Profits 2 Depriciation 3 Development Rebate 4 Direct Tax 5 8:5 per cent. of its paid up capital as at the commencement of the accounting year; 6 6 per cent. of its reserves, if any, shown in its balance-sheet as at the commencement of the accounting year including any profits carried forward from the previous accounting year. How to calculate bonus? For calculation of bonus the following details are required (i) number of working days (ii) Wage/Salary per month (iiii) Bonus Rate (i) Number of Working Days: For computing number of working days the following leave types should also be taken in to account. (a) absnece on account of layoff (b) absence on account of temporary disablement (c) abence on account of maternity leave Therfore Number of Working days= Actual working days +  absence on account of layoff +absence on account of temporary disablement +  absence on account of maternity leave The minimum number of working days for eligibility of Bonus is 30 days The Bonus is calculated on accounting year. Thefroe the working days should be calculated from 1st April to 30th March . (2) Wage/Salary per month Wages/Salary = Basci+Dearness Allowance (or Speciial Allowance)+ Any value of food concesssion.. The following two aspects are required to be kept in mind while computing bonus: (a) To be eligible for bonus the wages/salary should nott be more than Rs 10000 per month. (b) The wages/salary on which bonus is payble is Rs 3500/- per month irrespective of  salary. For example, if the wages of an employee is Rs 7000/- per month then the salary for the purpose of calculation of wages is Rs 3500/- only. (3) Bonus Rate: The payment of bonus depends on the profits earned by the Company. However, the minimum statutory bonus rate is 8.33% of the salary and maximum is 20 % of the salary. The Maximum Bonus payable for a person in an accounting year would be:  Bonus Salary(Rs 3500) X Bonus Rate (maximum 20%)X 12 months  which comes out as Rs 8400 per year. The minimum bonus payble is Rs 100. or  8.33 % of the salary whichever is higher. Bonus Calculator: Month Bonus Wage/Salary Month Bonus Wage/Salary April May June July August September October November December January February March Total Salary Bonus Rate Bonus You can input your details and find out the bonus payble .