Advance statutory bonus is a type of bonus paid to the employee in advance. The statutory bonus is paid according to the 1965 Act of Payment of bonus. The statutory bonus is paid at a minimum rate of 8.33% on salary to a maximum are of 20%. Employees that are eligible for statutory bonus are the persons who do not draw monthly wage beyond 10000. Statutory bonus which is to be paid is calculated according to the available surplus and may vary between 8.33% to 20%. Salary not only include basic but also other components such as a bonus.
What is an advance statutory bonus is explained as the bonus received by the employee in advance from the employer according to the amendment of Bonus Act. A recent study on Payment of Bonus bill of 2015 states the annual payment of bonus in particular establishments. According to this act, the payable bonus is calculated on the basis of employers profit and employee salary. This Act informs that the employees who draw a monthly salary of 10000 – 21000 are eligible to receive the bonus. Bonus are additional payments added to the salary from the profits if the company. Certain establishments which are mandatory to pay the bonus are the organizations with at least 20 employees and should be of minimum 5 years old and whose employees don’t draw more than 21000 per month.
According to this Act, wages are a sum of basic + DA and maximum statutory bonus has been revised to 20% of the minimum wage or 7000.
In case of retired employees, they are eligible for arrears and the bonus for the current employee should be paid within 8 months after the completion of the financial year and it is paid for the following financial year. Previously the ceiling point for the bonus is 3500 but now it is revised to 7000.
Advance Statutory bonus is calculated by the minimum( 8.33%) or maximum ( 20%) of 7000 or the minimum wage.
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