Notes

As quoted by Quora User, Flexible Benefit plan (FBP) is that portion of salary that can be received as against different expenses, to primarily save on income tax. Employees have the freedom to design (play around) their salary structure within the FBP amount, based on anticipated expenses.

Advance statutory bonus is a type of bonus paid to the employee in advance. ... 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%.

For the purpose computation of wage for Bonus calculation, the definition of salary is given below:

(21) “salary or wage” means all remuneration (other than remuneration in respect of over-time work) capable of being expressed in terms of money, which would, if the terms of employment, express or implied, were fulfilled, be payable to an employee in respect of his employment or of work done in such employment and includes dearness allowance (that is to say, all cash payments, by whatever name called, paid to an employee on account of a rise in the cost of living), but does not include-

(i) any other allowance which the employee is for the time being entitled to;

(ii) the value of any house accommodation or supply of light, water, medical attendance or other amenity or of any service or of any concessional supply of food grains or other articles;

(iii) any traveling concession;

(iv) any bonus (including incentive, production and attendance bonus);

(v) any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the employee under any law for the time being in force;

(vi) any retrenchment compensation or any gratuity or other retirement benefit payable to the employee or any ex gratia payment made to him;

(vii) any commission payable to the employee.

Explanation. – Where an employee is given in lieu of the whole or part of the salary or wage payable to him, free food allowance or free food by his employer, such food allowance or the value of such food shall, for the purpose of this clause, be deemed to from part of the salary or wage of such employee;

Reading into the RED coloured portion of the definition above, all allowances except specifically excluded items would form part of salary for the Bonus computation. But Item (1), coloured in green is slightly confusing, this would mean that all “Other” allowances would have to excluded. Also, the value of food coupons are included based on the explanation to the definition.