|Purpose & Object
||The Payment of Bonus Act, 1965 has been enacted to provide & regulate the payment of bonus to employees in certain specified establishments either on the basis of profits or on the basis of productivity of the establishment.
- Payment of Bonus Act, 1965 extends to whole of India.
- Payment of Bonus Act, 1965 applies to every factory and to every other establishment in which 20 or more persons are employed on any day during an accounting year;
- The Government may also apply the act on any factory or establishment in which has less than 20 but not less than 10 persons are employed;
- Payment of Bonus Act, 1965 is applicable on every employee whether doing any skilled, unskilled, manual, supervisory, managerial, administrative, technical or clerical work for hire or reward and whether the terms of employment are express or implied.
- Payment of Bonus Act, 1965 is applicable on employees drawing wages / salary up-to 21,000/- per month.
- Only those employees are entitled for bonus, who have worked for at least 30 working days in an accounting year.
|Rate of Bonus
- 8.33% of the salary or wages earned by an employee in a year or Rs. 100/-, whichever is higher.
- In case allocable surplus exceeds the amount of provision of minimum bonus, the employer shall be bound to pay maximum bonus not exceeding 20% of the salary or wages earned by employees.
- In case allocable surplus exceeds the maximum bonus (20% of the salary or wages earned by employees), the excess surplus shall be carried forward for being set on in the succeeding accounting years up to and inclusive of the 4th accounting year.