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TS Bhatia (HR Executive)     05 September 2008




 20 Replies

Shree. ( Advocate.)     05 September 2008

Dear  Bhatia,


 Bonus to be paid under Payment of Bonus Act,1965 is to be calculated as under :

1. It depends upon the percentage on which your company wants to give bonus to its employees. Minimum bonus is 8.33% of basic salary earned during the accounting year and Maximum is 20% under the payment of Bonus Act,1965.

2. Eligibility : Bonus under Payment of Bonus Act,1965 is required to be to employees whose salary ( Basic) is of less than Rs.10000.00 per month during the accounting year for which bonus is to be paid.

3. Bonus is to be calculated for eligible employees assuming salary ( Basic) as Rs.3500.00 per month or less, if, it is less then Rs.3500.00

4.Multiply the yearly sum of salary thus worked out as per above clause 3 with rate of bonus. The figure is bonus payable to employee under the act.

5.Payment is to be made on Register prescribed under the act.

6. Return of payment of bonus is to be submitted with ALC or other designated authority under the act , within 30 days of payment of bonus to employees.








Shree. ( Advocate.)     05 September 2008

Dear Bhatia,

  In addition to above information you should keep in mind that we should calculate bonus on number of working days of employees in that period, ie, we should not take into cosideration leaves,holidays & absents for the purpose of calculating Bonus.

Bonus is payed only for the number of worked days from april to march of every year completed year which will become due after 9 months from the date of eligibility for payment

Saravana Rajan   05 September 2008

Dear Madam,

The limit has been raised from 3500 to 10000 now. Pls  correct if am wrong.

- Saravana Rajan

Maya Arora (F.C.A., L.L.B.)     05 September 2008

Mr. Bhatia

All the points of Mr. Shree is accurate except point no. 2 & 3.  According to Payment of Bonus (Amendment) Act, 2007 w.r.e.f 1/04/2006 :-

1. Employee means any person (other than an apprentice) employed on a salary or wage not exceeding Rs. 10,000/- p.m.

Hence eligibility has been risen from Rs. 3,500/- p.m. to Rs. 10,000/- p.m.

2. Bonus is calculated for eligible employees assuming salary as (Basic) Rs. 3,500/- p.m. if his basic is more than Rs. 3,500/-p.m.  or the actual basic if it is less than Rs. 3,500/- p.m.

Please note down the changes made in amendment.



Maya Arora (F.C.A., L.L.B.)     05 September 2008

The limits were revised in last year but it was with retrospective effect from 1/04/2006.

Saravana Rajan   05 September 2008

Thank you for the inputs.

-Saravana Rajan

Guest (n/a)     06 September 2008

Dear Sir / Madam,

In addition to above, I would like to ask you that how many employees are necessary in the firm for entitlement of Bonus? Is there any number consider while sanctioning of Bonus?


Guest (n/a)     06 September 2008

Mr. Santosh

For Bonus Act to apply, the minimum no. of employees are 20.


Ramesh.s (DGM - HR)     09 September 2008

Sir / Madam


One more clarifiaction about the Bonus.

an employee how many days min worked during the finacial year he is eligible

for bonus. as per the T N Bonus Act 1965 section 8 says every employee shall be entitled to be paid  to bonus not less than thirty working days in that year.

if there is any change in this act.


kindly clarify my doubt




s ramesh



Saravana Rajan   10 September 2008

Dear Mr. Ramesh,
As of now there is no change in this act. The sections contained in the Payment of Bonus Act 1965 apply in your case.

An employee who has worked for not less than 30 days during a financial year is eligible for bonus at the rate of 8.33% of salary / wages.

-Saravana Rajan.

Ramesh.s (DGM - HR)     10 September 2008

Mr. Saravana Rajan

thanks for your reply

one more clarification. if any employee got consolidated salary for Rs.5000/-

for the year 2005 -06 next financial year i.e 2006 -07 or 2007 -08 the employee

designated as executive and fix basic, da, hra, transport allowance,m a and

other allowance total gross salry is more than Rs.8000/= but basic and da

comes around rs.4000/= but he is geting a bonus what he is got last finacial year for this year less. if employee apple to the mangement my bonus is very less and resived my basic and da more than rs5000/= ,the managemnt says not possiable. he cliam thro' labour officer

it is ok or any other legal opinin about this.

kindly clarify my doubt



s ramesh



Saravana Rajan   12 September 2008

Dear Mr. Ramesh,

In this case, if the employee had already accepted / acknowledged his revised package at the time of his promotion (a copy of the revised package has been given to him and he had signed on it), nothing can be done in this regard.

Since the employee had accepted his salary package with all the components clearly mentioned, he cannot later on claim to revise the same and the management cannot be held.

As far as my knowledge is concerned, there are remote chances that the employee can proceed legally as the management has paid him bonus according to the legal requirements.

Experts, pls comment further if I am wrong.

Saravana Rajan. S


Maya Arora (F.C.A., L.L.B.)     12 September 2008

Mr. Rajan

You are absolutely right. The employee has no remedy once he has accepted the salary package and getting it. The bonus will be calculated on the salary drawn.

Saravana Rajan   13 September 2008

Before acknowledging / accepting any document in employment like - job offer letter / appointment letter / pay details / confirmation letter etc., pls pay attention to what it contains to avoid issues later on like these.

-Saravana Rajan

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