Bonus Eligibility Question: Do Short Work Months Affect Your Bonus?

Hello,

I have a query regarding bonus payment. Bonus is calculated for a financial year. If a person works for only 5 to 10 days in one month, is he/she eligible for the bonus? Is there any constraint that a person should work x days then only he will get the bonus?

Payment of Bonus Act, 1965: Eligibility and Computation

The Payment of Bonus Act, 1965, does provide such specifications:

According to the Payment of Bonus Act 1965:

Section 8: Eligibility for Bonus

Every employee shall be entitled to be paid by his employer in an accounting year, a bonus, in accordance with the provisions of this Act, provided he has worked in the establishment for not less than thirty working days in that year.

Section 14: Computation of Number of Working Days

An employee shall be deemed to have worked in an establishment in any accounting year also on the days on which:

(a) He has been laid off under an agreement or as permitted by standing orders under the Industrial Employment (Standing Orders) Act, 1946.

(b) He has been on leave with salary or wage.

(c) He has been absent due to temporary disablement caused by an accident arising out of and in the course of his employment.

(d) The employee has been on maternity leave with salary or wage during the accounting year.

Regards,
Ramya Ranjan

Hi,

An employee needs to work for a minimum of 30 days in an accounting year to become eligible for a bonus, please.

Every employee not drawing salary/wages beyond Rs. 10,000 per month who has worked for not less than 30 days in an accounting year, shall be eligible for bonus for minimum of 8.33% of the salary/wages even if there is loss in the establishment whereas a maximum of 20% of the employee's salary/wages is payable as bonus in an accounting year.

Statutory Wage Ceiling for Bonus Calculation

Please note that the statutory wage ceiling for calculating the bonus has been increased to Rs. 21K. The minimum bonus is Rs. 7K or the minimum wage for the scheduled employment, as fixed by the appropriate Government, whichever is higher. The revised bonus rules are applicable with effect from April 14. Please find attached the notification for your ready reference.

Bonus Payment for Startups Experiencing Losses

In relation to bonus payment regarding losses, I would like to add that if it is a startup (new) establishment and is experiencing losses in the initial three years, then it is not mandatory for such an establishment to make bonus payments as per the provisions of the Act.

Fellow members, please feel free to correct me.

Dear Miss Sukanys,

Are you referring to "Part-Time Employee"? Please consider the total days for which the employee has been paid a salary to determine bonus eligibility. As honored members have pointed out, if the employee has been paid a salary for 30 days in a financial year, he is eligible for a bonus.