Is My Startup Eligible to Pay Diwali Bonuses? Understanding the Bonus Act Requirements

I am working as an HR in a startup company which was started last year in 2017, and it has completed 1 year. As it is nearing the end of the year, my employees are looking for a Diwali Bonus for this festive season. Please let me know how much amount we have to pay to the employees as per the Bonus Act, as well as how to calculate the bonus amount.

Bonus Payment Eligibility

I have learned that for the bonus payment to the employees, the establishment should have been in operation for a minimum of 5 years before being able to pay the bonus amount to the employee. Is this true?

I need to inquire with my management about the bonus payment for this year. Please provide me with the Bonus Act document with the required details.

I would be very grateful for this.

To clarify the position regarding the applicability of the Payment of Bonus Act, there is a provision for payment of bonus even in the first five accounting years (following the accounting year in which the employer sells the goods produced or manufactured by him or renders services). Bonus shall be payable only in respect of the accounting year in which the employer derives profit from such establishment.

As regards the details of the Act, enough material is available on the net.