Who will be eligible for bonus?
All employees earning up to the wage threshold (increased to Rs. 21,000 by the Amendments), and who have worked in the establishment for not less than 30 working days in the year are eligible to receive this statutory bonus.
How is bonus calculated under bonus act?
The bonus will be calculated as follows:
- If salary is equal to or less than Rs. 7,000, then the bonus will be calculated on the actual amount by using the formula: Bonus= Salary x 8.33 / 100.
- If salary is more than Rs. 7,000, then the bonus will be calculated on Rs. 7,000 by using the formula: Bonus= 7,000 x 8.33 /100.
What is the minimum and maximum bonus available to an employee?
The minimum bonus of 8.33% is payable by every industry and establishment under section 10 of the Act. The maximum bonus including productivity linked bonus that can be paid in any accounting year shall not exceed 20% of the salary/wage of an employee under the section 31 A of the Act.
How many employees are eligible for bonus?
The Payment of Bonus Act 1965 is applicable to all factories and companies who have 20 or more employees employed anytime with them during an accounting year. Also, as per the act, the bonus should be awarded on the basis of profit earned by the company or the productivity of an individual.
Is it mandatory to pay bonus?
As per statutory laws, the Government on India mandates organisations to pay yearly bonuses to their employees.
What is the salary limit for bonus?
The salary limited fixed for eligibility purposes is Rs. 3,500 per month and the payment is subject to the stipulation that the bonus payable to employees drawing wages or salary not exceeded to Rs. 10000 per month would be calculated as if their salary or wages is Rs. 3,500 per month.
What is the time limit for payment of bonus?
Time limit for Payment of Bonus (Section 19) 1. The bonus shall be paid within a period of 8 months from the close of accounting year. However, on application by the employer and on sufficient reasons, the Appropriate authority, by order may extend the said period of 8 months to a period not exceeding 2 years.
What is bonus period?
Bonus Period means the period for which a Bonus is payable. Unless otherwise specified by the Board, the Bonus Period shall be the fiscal year of the Company.
What is the maximum limit of bonus?
The Lok Sabha has approved amendments to the Payment of Bonus Act that seeks to make more workers eligible for bonus by raising the monthly pay eligibility limit of employees to Rs 21,000 from Rs 10,000.
What is bonus in salary structure?
Bonus is a reward that is paid to an employee for his good work towards the organisation. The basic objective to give bonus is to share the profit earned by the organisation amongst the employees and staff members.
Is it compulsory to give bonus to employees?
What is bonus rule in India?
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 even if there is loss in the establishment whereas a maximum of 20% of the employee’s salary/wages is payable as bonus in an accounting year.
What are bonus rules?
The Payment of Bonus Act, 1965 provides for a minimum bonus of 8.33 percent of wages. The salary limited fixed for eligibility purposes is Rs. 3,500 per month and the payment is subject to the stipulation that the bonus payable to employees drawing wages or salary not exceeded to Rs.
Is bonus pay compulsory in India?
Is annual bonus compulsory?
There is no legal obligation for an employer to pay bonuses to its employees. However, the position is different where the employer has previously paid bonuses to its employees, as the employees have a reasonable expectation that the employer will continue paying the bonuses as it has done in the past.
When bonus is applicable?
The Payment of Bonus Act applies to every factory and establishment employing not less than 20 persons on any day during the accounting year. The establishments covered under the Act shall continue to pay bonus even if the number of employees fall below 20 subsequently.