PAYMENT OF BONUS ACT, 1965 & THE RULES
To provide statutory obligations for payment of bonus to persons employed in certain establishments on the basis of profits or productivity.
Scope and Coverage
• Applicable all over India to factories under the Factories Act and to other establishments employing 20 or persons on any day during a year.
• Government can extend its coverage to establishments employing between 10 and 20 workers.
• Covers all workers including supervisors, managers, administrators, technical and clerical staff employed on salary or wages not exceeding Rs 2,500 ($55.97) per month.
Main Provision
• Eligibility for bonus.
• Payment of minimum and maximum bonus.
• Time limit for payment of bonus.
• Deductions from bonus.
• Computation of gross profits and available allocable surplus.
• Rights of employees.
When to Consult And Refer
• When the factory if registered under the Factories Act.
• When the number of employees in the establishment reaches 20 or above.
• When calculating the bonus.
Eligibility for bonus - Every employee shall be entitled to be paid by his employer in an accounting year, 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.
Bonus to be paid under Payment of Bonus Act,1965 is to be calculated as under :
1. It depends upon the percentage on which your company wants to give bonus to its employees. Minimum bonus is 8.33% of basic salary earned during the accounting year and Maximum is 20% under the payment of Bonus Act,1965.
2. Eligibility : Bonus under Payment of Bonus Act,1965 is required to be to employees whose salary ( Basic) is of less than Rs.3500.00 per month during the accounting year for which bonus is to be paid.
3. Bonus is to be calculated for eligible employees assuming salary ( Basic) as Rs.2500.00 per month or less, if, it is less then Rs.2500.00
4.Multiply the yearly sum of salary thus worked out as per above clause 3 with rate of bonus. The figure is bonus payable to employee under the act.
5. Payment is to be made on Register prescribed under the act.
6. Return of payment of bonus is to be submitted with ALC or other designated authority under the act , within 30 days of payment of bonus to employees.
1. It depends upon the percentage on which your company wants to give bonus to its employees. Minimum bonus is 8.33% of basic salary earned during the accounting year and Maximum is 20% under the payment of Bonus Act,1965.
2. Eligibility : Bonus under Payment of Bonus Act,1965 is required to be to employees whose salary ( Basic) is of less than Rs.3500.00 per month during the accounting year for which bonus is to be paid.
3. Bonus is to be calculated for eligible employees assuming salary ( Basic) as Rs.2500.00 per month or less, if, it is less then Rs.2500.00
4.Multiply the yearly sum of salary thus worked out as per above clause 3 with rate of bonus. The figure is bonus payable to employee under the act.
5. Payment is to be made on Register prescribed under the act.
6. Return of payment of bonus is to be submitted with ALC or other designated authority under the act , within 30 days of payment of bonus to employees.
n addition to above information you shauld keep in mind that we should calculate bonus on number of working days of employees in that period, ie, we should not take into cosideration leaves holidays & absentes for the purpose of calculating Bonus.
Bonus is payed only for the number of worked days from april to march of every eyer completed year which will become due after 9 months from the date of eligibility for payment.
Bonus is payed only for the number of worked days from april to march of every eyer completed year which will become due after 9 months from the date of eligibility for payment.
Maintenance of registers.- Every employer shall prepare and maintain the following registers, namely:-
(a) a register showing the computation of the allocable in form A:
(b) a register showing the set-on and set-off of the allocable surplus,
(c) a register showing the details of the amount of bonus due to each of the employees, the deductions and the amount actually disbursed, in Form C.
[1]{5. Annual returns. – Every employer shall send a return in Form D to the Inspector so as to reach him within 30 days after the expiry of the time limit specified in section 19 for payment of bonus.}
