Calculation of Bomus

Save Share

This query is : Resolved

Raghav (Querist)
Follow

15 May 2010 Dear Sir,
Please give me the details regarding the calculation of Bonus for financial year 2010-11.

Thanks & Regards,
Raghav Jha

CMA.Palani Arumugam

CMA.Palani Arumugam (Expert)
Follow

15 May 2010 The Payment of Bonus Act, 1965 gives to the employees a statutory right to a share in the profits of his employer. The act enables the employees to get a minimum bonus equivalent to one month's salary or wage(8.33% of annual earnings) whether the employer makes profit or not. But the Act also puts a ceiling on the bonus and the maximum bonus payable under the Act is equivalent to 2 1/2 months salary or wages (20% of annual earning).
Applicability of Bonus Act :
The Act applies to:-
A) Every factory (as defined in the Factories Act), and
B) Every other establishment in which 20 or more person are employed on any day during accounting year.
C) Once the act applies, it shall continue to be governed, notwithstanding the number of persons employed falls below the limit.

Eligibility of employees:
a) Employees(other than apprentice) who have worked for not less than 30 days in that A/c year.
b) Employees drawing salary/wages exceeding 10000 are not employees.
c) With the promulgamation of the ordinance, the salary ceiling has been increased to Rs.10000/- p.m. The entitlement for calculating bonus will be Rs.3500/- per month.

Those employed through contractor or building operation have now been covered under the Payment of Bonus Act.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now