The process of calculating the mandatory annual bonus, equivalent to one month’s salary, involves determining an employee’s total basic salary earned within a calendar year and dividing it by twelve. For example, an employee with a total basic salary of $36,000 over a year would receive a bonus of $3,000.
This mandated benefit provides a financial boost to employees, particularly during the holiday season. Its historical context stems from labor laws designed to improve worker welfare and provide a more equitable distribution of company profits. It serves as a valuable supplement to regular income, assisting with expenses and encouraging employee morale and productivity.
