Dear Friends, Pl. find attached Bonus amendment bill,2010. Thanks/Rajesh
From India, Delhi
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1From India, Delhi
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Dear Professionals, Please anyone define bonus act and who is eligible for bonus. I know how to calculate bonus. Waiting for answer. Regards Jeetu Singh Bisht HR-Assistant
From India, Kashipur
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From India, Kashipur
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Dear All,
Eligibility for Bonus
Section 8 – Eligibility of Bonus
Section 8 of the Payment of Bonus Act, 1965, states that – 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 30 working days in that year.
The act simply means that every employee who has completed 30 working days in any establishment in that year is entitled to receive a bonus from the employer, given that all the provisions of this Act are satisfied.
Under this Act, every employee who is receiving a salary or wages up to Rs. 3,500 p.m. (amended to Rs. 10,000 p.m. w.e.f. 01.10.2010*) and is engaged in any kind of work, whether skilled, unskilled, managerial, supervisory, etc., is entitled to a bonus for every accounting year if he has worked for at least 30 working days in that year. However, employees of L.I.C., Universities and Educational institutions, Hospitals, Chamber of Commerce, R.B.I., IFCI, U.T.I., Social Welfare institutions are not entitled to a bonus under this Act.
Section 9 – Disqualification for Bonus
Section 9 of the Act provides for conditions under which an employee can be disqualified from receiving a bonus under the Payment of Bonus Act, 1965. The Act states that –
Notwithstanding anything contained in this Act, an employee shall be disqualified from receiving a bonus under this Act, if he is dismissed from service for –
a. Fraud;
b. Riotous or violent behavior while on the premises of the establishment; or
c. Theft, misappropriation, or sabotage of any property of the establishment.
Thus, if an employee is terminated from his job because of his inappropriate behavior on the establishment’s premises, then such an employee would not be eligible for any bonus.
Section 16 – Special Provision
In case an establishment is newly set up, the eligibility and payment of bonus of employees would differentiate. The employees shall be entitled to be paid a bonus in accordance with the following provisions:
1. In the first 5 years, the employees will be eligible to and shall be paid the bonus of only those accounting years in which the employer derives profit from such establishment, and such bonus shall be calculated in accordance with the provisions of this act in relation to that year.
2. For the 6th and 7th accounting years, the employees will be eligible to and shall be paid the bonus of their respective accounting years, including the consideration of set-on or set-off as illustrated in schedule 4.
3. From the 8th accounting year, the employees shall be eligible to and entitled to be paid a bonus in accordance with the provisions of section 15 (set-on and set-off of allocable surplus). From the 8th accounting year, Section 15 shall be applicable in relation to such establishment as they are applicable in relation to any other establishment.
* New Delhi, Oct 1: The Union Cabinet today amended the Bonus Act, 1965, thus raising the eligibility limit for payment of the bonus from the salary or wage of 3,500 rupees to 10,000 rupees per month.
The Cabinet also amended section 12 of the Act, raising the ceiling for calculation purposes from the salary or wage of Rs. 2,500 to Rs. 3,500 per month.
Section 32(vi) of the Act has been deleted to cover the employees employed through contractors on building operations.
Regards
From India, Chandigarh
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Eligibility for Bonus
Section 8 – Eligibility of Bonus
Section 8 of the Payment of Bonus Act, 1965, states that – 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 30 working days in that year.
The act simply means that every employee who has completed 30 working days in any establishment in that year is entitled to receive a bonus from the employer, given that all the provisions of this Act are satisfied.
Under this Act, every employee who is receiving a salary or wages up to Rs. 3,500 p.m. (amended to Rs. 10,000 p.m. w.e.f. 01.10.2010*) and is engaged in any kind of work, whether skilled, unskilled, managerial, supervisory, etc., is entitled to a bonus for every accounting year if he has worked for at least 30 working days in that year. However, employees of L.I.C., Universities and Educational institutions, Hospitals, Chamber of Commerce, R.B.I., IFCI, U.T.I., Social Welfare institutions are not entitled to a bonus under this Act.
Section 9 – Disqualification for Bonus
Section 9 of the Act provides for conditions under which an employee can be disqualified from receiving a bonus under the Payment of Bonus Act, 1965. The Act states that –
Notwithstanding anything contained in this Act, an employee shall be disqualified from receiving a bonus under this Act, if he is dismissed from service for –
a. Fraud;
b. Riotous or violent behavior while on the premises of the establishment; or
c. Theft, misappropriation, or sabotage of any property of the establishment.
Thus, if an employee is terminated from his job because of his inappropriate behavior on the establishment’s premises, then such an employee would not be eligible for any bonus.
Section 16 – Special Provision
In case an establishment is newly set up, the eligibility and payment of bonus of employees would differentiate. The employees shall be entitled to be paid a bonus in accordance with the following provisions:
1. In the first 5 years, the employees will be eligible to and shall be paid the bonus of only those accounting years in which the employer derives profit from such establishment, and such bonus shall be calculated in accordance with the provisions of this act in relation to that year.
2. For the 6th and 7th accounting years, the employees will be eligible to and shall be paid the bonus of their respective accounting years, including the consideration of set-on or set-off as illustrated in schedule 4.
3. From the 8th accounting year, the employees shall be eligible to and entitled to be paid a bonus in accordance with the provisions of section 15 (set-on and set-off of allocable surplus). From the 8th accounting year, Section 15 shall be applicable in relation to such establishment as they are applicable in relation to any other establishment.
* New Delhi, Oct 1: The Union Cabinet today amended the Bonus Act, 1965, thus raising the eligibility limit for payment of the bonus from the salary or wage of 3,500 rupees to 10,000 rupees per month.
The Cabinet also amended section 12 of the Act, raising the ceiling for calculation purposes from the salary or wage of Rs. 2,500 to Rs. 3,500 per month.
Section 32(vi) of the Act has been deleted to cover the employees employed through contractors on building operations.
Regards
From India, Chandigarh
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Dear Surendra, it is a good effort that you reproduce the provisions of the Bonus Act, but especially you missed or forgot to explain the definition of 'EMPLOYEE'. Those who are getting a salary up to 10,000/- are only called an EMPLOYEE. On the contrary, those who are getting more than 10,000/- p.m. are not employees under the said act and naturally are not entitled to a BONUS. Secondly, those who are getting salary/wages between 3,500 to 10,000 shall be offered a bonus up to 3,500/- if the employer enjoyed the benefit of the provision.
Regards,
KIRAN KALE
From India, Kolhapur
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Regards,
KIRAN KALE
From India, Kolhapur
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Dear Sir, can anyone provide the "OFFICIAL GAZETTE" in this regard? The amendment comes into force only when the "OFFICIAL GAZETTE" notification is released. Hence, can anyone try to find the "OFFICIAL GAZETTE"?
Regards, Prasad SBR
From India, Pune
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Regards, Prasad SBR
From India, Pune
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It was stated in my post that:
"Under this Act, every employee who is receiving a salary or wages up to Rs. 3,500 per month (amended to Rs. 10,000 per month with effect from 01.10.2010) and is engaged in any kind of work, whether skilled, unskilled, managerial, supervisory, etc., is entitled to a bonus for every accounting year if they have worked for at least 30 working days in that year. However, employees of L.I.C., Universities and Educational institutions, Hospitals, Chamber of Commerce, R.B.I., IFCI, U.T.I., and Social Welfare institutions are not entitled to a bonus under this Act."
It very clearly defines the term "employee."
Parliament has passed the bill. The effective date is 01 October 2010. The Notification will be uploaded as and when issued.
From India, Chandigarh
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"Under this Act, every employee who is receiving a salary or wages up to Rs. 3,500 per month (amended to Rs. 10,000 per month with effect from 01.10.2010) and is engaged in any kind of work, whether skilled, unskilled, managerial, supervisory, etc., is entitled to a bonus for every accounting year if they have worked for at least 30 working days in that year. However, employees of L.I.C., Universities and Educational institutions, Hospitals, Chamber of Commerce, R.B.I., IFCI, U.T.I., and Social Welfare institutions are not entitled to a bonus under this Act."
It very clearly defines the term "employee."
Parliament has passed the bill. The effective date is 01 October 2010. The Notification will be uploaded as and when issued.
From India, Chandigarh
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Dear Sir, Thanks for your valuable information regarding Bonus Act. It will very help full for us, if you explain the term Wages/salary Under this Act Regards, More A H
From India, Pune
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From India, Pune
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Hello all, Kindly suggest me whether this has to be paid from this year onwards. Best regards, Pradeep
From India, Mumbai
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From India, Mumbai
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The definition of 'wage or salary' is provided by the Payment of Bonus Act, 1965, at section 2(21). Please go through it.
With Regards,
R.N.Khola
From India, Delhi
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With Regards,
R.N.Khola
From India, Delhi
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The amendment to S.2(13) stipulating a maximum salary of Rs. 10,000 for eligibility under the Act was introduced in 2007, effective from 1/4/06. I have not been able to locate any 2010 amendment to the Act or even a bill. Please let us know the source of this information?
From India, Bangalore
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From India, Bangalore
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Sir, Please state that if the following file attached amendment is applicable or not??
From India, Nagpur
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From India, Nagpur
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
Amendment to Payment of Bonus Act 2015.jpg
Payment of Bonus Amendment Bill, 2015.pdf