Understanding the Payment of Bonus Act: What Employers in Maharashtra Need to Know

Guidelines on the Payment of Bonus Act

I am working with an IT company in Maharashtra. I wanted to know the guidelines regarding the liability of the employer and the general rules of the Payment of Bonus Act and its applicability from an employer's perspective.

In addition to the above, I wanted to clarify doubts regarding the Bonus Act: Is it applicable to a company that employs 20 or more employees, or would it be applicable if 20 or more employees fall under the salary bracket of Gross Rs. 21,000/- per month? Gross salary should be calculated excluding conveyance or car fuel allowances. Please correct me and provide the correct information so that we can implement these things in our organization.

Regards,
Tanu

Applicability of the Payment of Bonus Act

The Payment of Bonus Act is applicable to all companies that employ 20 or more workers. When considering the components that fall under the Bonus Act, there is a simple rule of thumb: "‘salary or wage’ under the Bonus Act includes all guaranteed components of an employee's salary (not just the basic salary)." If conveyance or fuel allowances are guaranteed components (not variable and not dependent on performance or actual usage), then they will fall under wages for the purpose of Bonus calculations.

Hope this clarifies your doubts.

Regards,
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