Payment Of Bonus Act 1965 & Bonus Calculation Complete Guide

By | April 15, 2017

Bonus Act Applicability : Payment of bonus act 1965 will be applicable to entire India where an organizations employs a minimum of 10 employees with aid of power and organizations which employs a minimum of  20 employees with out aid of power. Here you can know complete details about bonus act 1965 and bonus calculation process .

Payment Of Bonus Act 1965

payment of bonus act 1995

Eligibility

Any employees whose monthly salary is less than 21000 Rs and when he or she works for atleast 30 days in a financial year will be eligible to get the bonus under bonus act 1965.

Earlier the minimum wage limit to get bonus is 10000 Rs but as per the amendments made in payment of bonus act 2015 bill the wage limit is increased to 21000 Rs. So as per the latest amendments the minimum wage ceiling limit for bonus  is 21000 Rs i.e employees whose salary is less than 21000 Rs will get the bonus.

Read : Gratuity Calculation In India

Note : The maximum bonus salary that will be considered for bonus calculation is 7000 Rs . For an example if an employee basic salary + DA is 12000 Rs then only 7000 Rs will be considered for bonus calculation.

If an employee basic salary + DA is less than 7000 Rs then the  original basic + DA will be considered for bonus calculation. For an example if an employee basic +DA is 5500 Rs then 5500 Rs will be considered for bonus calculations.

However some organizations will pay more than this limit, when it is  more then there is no problem

Bonus Calculation 

Bonus will be calculated on basic salary + Dearness Allowances (DA) of employees. Other house rent allowances and incentives are not included in bonus calculation.

A minimum of 8.33% of bonus is mandatory that every employer has to give it to their employees and the maximum percentage in 20%.

Bonus Calculation in India with example

For an example if an employee basic salary is 12000 Rs ( here we will take 7000 Rs only as bonus salary) and he works for 12 months in a financial year then the bonus amount he will get in that year will be calculated like this :

Bonus  Calculation Formula In India = (Basic  Salary + DA) x Number Of Months Worked x 8.33%

=  7000 x 12 x 8.33% = 6997 Rs

Bonus Calculation Excel sheet :  Bonus calculation excel sheet will be like in below image.

payment of bonus act

↓ Download Bonus Calculation Excel Sheet

One thought on “Payment Of Bonus Act 1965 & Bonus Calculation Complete Guide

  1. AMIT KUMAR

    DEAR SIR,
    The above calculation for bonus is not correct as 7000 Rs is mentioned as ceiling for bonus calculation.But acc.to act Rs 7000 or minimum wages for the schedule employment decided by appropriate govt. which ever is higher .So we cant take 7000 Rs for calculating bonus for all the state .it will vary from state to state.

    Reply

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