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APPLICABILITY

11 If a management has a number of departments, undertakings or branches, should they be treated as separate establishments or as one composite establishment?:

If an establishment consists of different departments or undertakings or has branches, whether situated in the same place or in different places, unless a separate balance-sheet and profit and loss account are prepared and maintained in respect of them, all such departments of undertakings or branches should be treated as parts of the same establishment for the purpose of computation of bonus, and once they are treated as parts of the same establishment, they should be continued to be treated as such.
12 If a management has a number of departments, undertakings or branches, should they be treated as separate establishments or as one composite establishment?:

If an establishment consists of different departments or undertakings or has branches, whether situated in the same place or in different places, unless a separate balance-sheet and profit and loss account are prepared and maintained in respect of them, all such departments of undertakings or branches should be treated as parts of the same establishment for the purpose of computation of bonus, and once they are treated as parts of the same establishment, they should be continued to be treated as such.

CALCULATION

13 What component of wages are used to calculate Bonus ?

Salary is defined as Basic Wage + DA and does not include allowances.Salary is capped at Rs 3500 for the purposes of bonus calculation
14 What component of wages are used to calculate Bonus ?

Salary is defined as Basic Wage + DA and does not include allowances.Salary is capped at Rs 3500 for the purposes of bonus calculation
15 What is the minimum bonus prescribed by the Act?

The minimum bonus prescribed by the Act is 8.33 % of annual basic salary, which is equivalent to one months basic salary or Rs. 100 whichever is higher.
16 What is the minimum bonus prescribed by the Act?

The minimum bonus prescribed by the Act is 8.33 % of annual basic salary, which is equivalent to one months basic salary or Rs. 100 whichever is higher.
17 What is the maximum bonus payable under the Act?

The maximum bonus payable under the Act is 20 % of annual basic salary or two and a half months basic salary. Basic salary is capped at Rs 3500 for the purposes of bonus calculation, so maximum bonus payable is Rs 8,400 (20% of Rs 42000 i.e. Rs 3500*12 month)
18 What is the maximum bonus payable under the Act?

The maximum bonus payable under the Act is 20 % of annual basic salary or two and a half months basic salary. Basic salary is capped at Rs 3500 for the purposes of bonus calculation, so maximum bonus payable is Rs 8,400 (20% of Rs 42000 i.e. Rs 3500*12 month)
19 What is the meaning of "available surplus" and "allocable surplus"

Bonus payable under the Act is linked with profits. The employer has to calculate "gross profits" of his establishment in the manner specified in section 4. Then from "gross profits" so calculated he has to deduct the sums referred to in section 6. The balance is called "available surplus". A percentage of the available surplus calculated in accordance with the provisions of sub-section (4) of section 2 is called "allocable surplus". Where, in respect of any year the allocable surplus exceeds the amount of minimum bonus payable to the employees, the employer must pay to every employee in respect of that year bonus in proportion to the salary or wage earned by the employee during the year subject to a maximum of twenty percent of such salary or wage. (Subsection 2(4), 4 , 5, 6 and amp; 11)
20 What is the meaning of "available surplus" and "allocable surplus"

Bonus payable under the Act is linked with profits. The employer has to calculate "gross profits" of his establishment in the manner specified in section 4. Then from "gross profits" so calculated he has to deduct the sums referred to in section 6. The balance is called "available surplus". A percentage of the available surplus calculated in accordance with the provisions of sub-section (4) of section 2 is called "allocable surplus". Where, in respect of any year the allocable surplus exceeds the amount of minimum bonus payable to the employees, the employer must pay to every employee in respect of that year bonus in proportion to the salary or wage earned by the employee during the year subject to a maximum of twenty percent of such salary or wage. (Subsection 2(4), 4 , 5, 6 and amp; 11)
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