How much bonus will you get on a salary of ₹21,000? Know the complete calculation of 8.33% to 20%, ceiling limit and what is the mandatory rule of 30 days.

There is always curiosity in the minds of employees regarding the bonus received at the end of the festive season or the end of the financial year, how much amount will come into their account. The payment of statutory bonus in India is governed by the provisions of the Payment of Bonus Act, 1965 (and the new Code on Wages).

According to the law, it is mandatory to give bonus in any institution or company where 20 or more employees are employed. Under the rule, if an employee’s monthly salary (Basic Salary + Dearness Allowance i.e. Basic + DA) ₹21,000 or less then he is legally entitled to receive statutory bonus. If the basic salary exceeds ₹21,000 by even ₹1, the company is not legally obliged to pay a bonus; However, companies can give incentive or ex-gratia bonus under their policy.

The most important and mandatory rule of bonus law is ’30 Working Days Rule’: :

• An employee is considered entitled to receive bonus in the relevant financial/accounting year only if he/she has worked in the organization during that year. At least 30 working days Have worked.

• Not necessary for 30 consecutive days: It is not necessary that the 30 days be consecutive; The total attendance in the entire year should be 30 days.

• Probation, Temporary and New Employees: This rule applies to everyone. If an employee leaves the job or joins a new job in the middle of the year and has completed 30 days, then he is fully entitled to get the bonus in proportion to the months he has worked (Pro-rata Basis).

• If an employee is able to work only 29 days in a year, he will not legally get any bonus.

Often employees think that if their salary is ₹ 21,000, then the bonus will be withdrawn directly at ₹ 21,000, but this is where the biggest confusion lies.

Two different ceilings have been set in the law:

1. Eligibility Ceiling: ₹21,000 per month (this decides whether you will get the bonus or not).

2. Calculation Ceiling: ₹ 7,000 per month or the ‘Minimum Wage’ fixed by the State Government for the concerned work, whichever is higher.

That is, if the basic + DA of an employee is ₹ 21,000, then for calculation his monthly salary will not be considered as ₹ 21,000, but ₹7,000 (or higher minimum wage) Only this will be considered.

By law, every company has to give a minimum bonus of 8.33% and a maximum of 20%. It is legally mandatory to pay a minimum bonus of 8.33% even if the company incurs losses.

If we use standard calculation basis ₹7,000 per month (₹84,000 annually) as base:

(Note: If the government minimum wage in your state or industry is more than ₹7,000, say ₹10,000 per month, then the calculation will be based on ₹10,000, making the minimum bonus ₹9,996 and the maximum bonus at 20% up to ₹24,000).

There are also some strict sections in the law under which an employee can be deprived of bonus:

• If found involved in financial fraud or embezzlement.

• Violent, indecent or illegal conduct in the workplace.

• On dismissal from service on charges of theft, vandalism or willful damage to company property.

As per the rules, it is mandatory for companies to pay this bonus amount into the bank accounts of eligible employees within 8 months of the end of the financial year.