I just recently learnt that there is a cap of bonus paid to employees at 20% of the salary. My questions are:
i) Is it legally allowed to pay bonus higher than the 20% cap?
ii) What should my company do if the employees have been given >20%?
Any advice will be appreciated!
Best Regards,
Sanjay
2[11. Payment of maximum bonus.—(1) Where in respect of any accounting year referred to in section 10, the allocable surplus exceeds the amount of minimum bonus payable to the employees under that section, the employer shall, in lieu of such minimum bonus, be bound to pay to every employee in respect of that accounting; year bonus which shall be an amount in proportion to the salary or wage earned by the employee during the accounting year subject to a maximum of twenty per cent, of such salary or wage. (extracts from THE PAYMENT OF BONUS ACT, 1965)
2 Section 11 omitted by Act 23 of 1976, sec. 8 (w.r.e.f. ) and ins. by Act 66 of 1980, sec. 6 (w.r.e.f. 21.8.1980)
i) Is it legally allowed to pay bonus higher than the 20% cap?
ii) What should my company do if the employees have been given >20%?
Any advice will be appreciated!
Best Regards,
Sanjay
2[11. Payment of maximum bonus.—(1) Where in respect of any accounting year referred to in section 10, the allocable surplus exceeds the amount of minimum bonus payable to the employees under that section, the employer shall, in lieu of such minimum bonus, be bound to pay to every employee in respect of that accounting; year bonus which shall be an amount in proportion to the salary or wage earned by the employee during the accounting year subject to a maximum of twenty per cent, of such salary or wage. (extracts from THE PAYMENT OF BONUS ACT, 1965)
2 Section 11 omitted by Act 23 of 1976, sec. 8 (w.r.e.f. ) and ins. by Act 66 of 1980, sec. 6 (w.r.e.f. 21.8.1980)