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Friday, March 29, 2013

THE PAYMENT OF BONUS ACT, 1965



      The Payment of Bonus Act, 1965 provides for the payment of bonus to persons employed in certain establishments, employing 20 or more persons, on the basis of profits or on the basis of production or productivity and matters connected therewith. 
      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.
      Details of amendments to  the Payment of Bonus Act, 1965:
      S. No. Year of Amendment Eligibility limit   Calculation ceiling 
                                                    (Rs. Per Month)               (Rs. Per Month)
      1.                 1965 Rs. 1600                                Rs. 750
      2. 1985  Rs. 2500 Rs. 1600
      3. 1995                     Rs. 3500  Rs. 2500
      4. 2007 Rs. 10000                              Rs. 3500

      The last amendment to the Act was notified on 12th December, 2007.
      The minimum bonus of 8.33% of (Rs. 3500/- X 12= Rs. 42,000/-) is approximately Rs. 3500/-.
      The 20% of above referred Rs. 42,000/- is Rs. 8,400/-.  However, the limit is given as Rs. 8,300/-.
  • Source : http://labour.nic.in/content/division/wage-board.php

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