Definition and Applicability of the Act:
In every establishment and factory employing 10 or more persons with the aid of power and 20 or more persons without the aid of power.
In respect of the commencement of books of account in an accounting year, the accounts are closed and balanced even if there is a profit or loss maintained.
Set-on and set-off allocable surplus.
Bonus denotes gross salary and DA (dearness allowance) and the usual fringe benefits. The provision of payment of bonus does not include any employer's contribution to pension, provident fund, or gratuity payable on retirement.
Eligibility of Payment of Minimum Bonus:
All covered employees will be eligible for a bonus only when they have worked for 30 working days in that accounting year, i.e., accrual of bonus after completion of a minimum of 30 working days in a year.
Eligible Employees:
Employees' wages up to Rs. 10,000 to Rs. 15,000 per month or beyond.
Calculation of Bonus:
The existing salary limit is Rs. 5000 p.m., with the ceiling increased from Rs. 3500 p.m. For calculation purposes, Rs. 5000 p.m. is the limit. The minimum bonus limit is enhanced from 8.33% to 11%, and the maximum bonus limit is 20%, following the amendment of the Payment of Bonus Amendment 2010 (15 of 2010).
Method of Calculation of Bonus:
Gross Salary / bonus limit * min or max bonus percentage * number of months worked in a year.
e.g., If an employee's actual gross salary = Rs. 7000 / bonus limit i.e., Rs. 5000 * min bonus limit i.e., 8.33% or max bonus limit i.e., 11% * number of months worked in a year i.e., 09 months (for example) = Payment of bonus to an employee in that accounting year.
Time Limit for Payment of Bonus:
Covered employees, for the purpose of payment of bonus, the provision is 8 months from the close of the accounting year.
The regulated act of The Payment of Wages Act, 1936, follows that the term 'wages' includes additional remuneration payable under the terms of employment, whether called a bonus under a scheme of profit-sharing, but does not form part of the remuneration payable under the terms of employment by the nature of an award or settlement between the parties or the order of a court.
From India, New Delhi
Acknowledge(0)
Amend(0)
1In every establishment and factory employing 10 or more persons with the aid of power and 20 or more persons without the aid of power.
In respect of the commencement of books of account in an accounting year, the accounts are closed and balanced even if there is a profit or loss maintained.
Set-on and set-off allocable surplus.
Bonus denotes gross salary and DA (dearness allowance) and the usual fringe benefits. The provision of payment of bonus does not include any employer's contribution to pension, provident fund, or gratuity payable on retirement.
Eligibility of Payment of Minimum Bonus:
All covered employees will be eligible for a bonus only when they have worked for 30 working days in that accounting year, i.e., accrual of bonus after completion of a minimum of 30 working days in a year.
Eligible Employees:
Employees' wages up to Rs. 10,000 to Rs. 15,000 per month or beyond.
Calculation of Bonus:
The existing salary limit is Rs. 5000 p.m., with the ceiling increased from Rs. 3500 p.m. For calculation purposes, Rs. 5000 p.m. is the limit. The minimum bonus limit is enhanced from 8.33% to 11%, and the maximum bonus limit is 20%, following the amendment of the Payment of Bonus Amendment 2010 (15 of 2010).
Method of Calculation of Bonus:
Gross Salary / bonus limit * min or max bonus percentage * number of months worked in a year.
e.g., If an employee's actual gross salary = Rs. 7000 / bonus limit i.e., Rs. 5000 * min bonus limit i.e., 8.33% or max bonus limit i.e., 11% * number of months worked in a year i.e., 09 months (for example) = Payment of bonus to an employee in that accounting year.
Time Limit for Payment of Bonus:
Covered employees, for the purpose of payment of bonus, the provision is 8 months from the close of the accounting year.
The regulated act of The Payment of Wages Act, 1936, follows that the term 'wages' includes additional remuneration payable under the terms of employment, whether called a bonus under a scheme of profit-sharing, but does not form part of the remuneration payable under the terms of employment by the nature of an award or settlement between the parties or the order of a court.
From India, New Delhi
Acknowledge(0)Amend(0)
To my knowledge, the bonus payable to an employee whose salary exceeds Rupees 3,500 per mensem shall be calculated as if their salary or wage were 3,500 rupees per mensem. Has it been revised upward to 5,000? If so, has the amendment come into force, and from which date is it effective?
Regards,
A. K. Mishra
From India, Bhubaneswar
Acknowledge(0)Amend(0)
Regards,
A. K. Mishra
From India, Bhubaneswar
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.
THE PAYMENT OF BONUS ACT(with amendments & comments) 1965.docx
Amendment to Payment of Bonus Act 2015.jpg
Bigger bonuses for more as Lok Sabha amends Payment of Bonus Act - The Economic Times.pdf