1. Payment Of Bonus Act,1965
By-Subodh Shahare
M.Sc.(Biotech) & M.B.A(HRM)
Indian Institute Of Cost &
Management Studies & Research,
Pune.
2. Introduction
Payment of Bonus Act,1965 extends to Whole Of India.
Applicable to every factory where 20 or more persons are employed.
To be eligible for bonus under the Act minimum 30 days work is necessary.
Under fraud, misbehaviour charges individual employee will be restricted to
avail the benefits of the Bonus Act,1965.
Minimum bonus to be paid compulsory by employer or establishments.
Bonus to be paid in cash within a period of 80 days from the close of an
accounting year.
If any amount is due to employee as bonus from his employer he can write &
apply to the Government for the recovery of such bonus amount from
employer.[Recovery of Bonus from Employer-Sect.21]
Such application shall be made within one year from the date on which the
money become due to the employee from the employer.
3. Continued....
Available Surplus- Net Profit of the company after making
deductions as per Sec 6 of the act.
Allocable Surplus- Employees’ share in the Available Surplus.
Minimum Bonus Percentage– 8.33%
Maximum Bonus Percentage- 20%
SET ON- When the allocable surplus in a particular year exceeds
maximum bonus(20%) Such amount should be carried forward to
next year to the extent of 20% upto 4 accounting years
SET OFF- When in a year, to pay minimum bonus there is no
allocable surplus or if it falls short, or no carried forward amount,
then it shall be carried forward t next year with special permission
from the govt. (upto 4 accounting years)
4. Bonus Calculation As Per Bonus Act,1965
I. Every employee drawing salary/wages upto Rs. 10,000 per
month who has worked for not less than 30 days in an
accounting year, shall be eligible for bonus for minimum of
8.33% of the salary/wages.
II. Employees having salary/wages range between Rs. 3500 to Rs.
10,000 per month; for the purpose of payment of bonus, their
salaries/wages would be deemed to be Rs. 3500 ( 2007
amendment)
III. Bonus =3500*12*8.33/100
5. Bonus Calculation In General Cases
Bonus=Basic Salary+DA*12*8.33%
For Example if Basic salary is 5000 and DA 1000 so ,
Bonus =5000+1000*12*8.33/100
= 6000*12*8.33/100
= 72000*8.33/100
= 5997.6 RS. Annual Bonus
NOTE: The rate will be negotiated and the rate affordable to the
company will be declared