Understanding Bonus Calculations: How Do You Count Employees for Form D?

Greetings, under the Payment of Bonus Act, while filing annual returns in FORM D, how do we calculate the total number of employees in the financial year? Should we consider the number of employees at the start or end of the financial year, or the average number of employees in a year?

How is the percentage of the bonus decided?
Is it mandatory to give an 8.33% or 20% bonus?

Dear Megha, You have to consider actual employees (to whom the bonus was paid in the financial year) and calculate on an actual basis. The Payment of Bonus Act, 1965 provides for a minimum bonus of 8.33% (minimum) to 20% (maximum) of earned wages.

Every employee shall be entitled to be paid by their employer in an accounting year, a bonus, following the provisions of this Act, provided they have worked in the establishment for not less than 30 working days in that year.