Payment Of

Bonus
Act,1965.
Vijayarajan
Skill Zone, Kannur.
Mob: 9447014166
Applicability

Every factory or an establishment

employing not less than 20 employees
during an accounting year.
The establishment once covered under
the Act shall continue the coverage
even if the number of employees falls
below 20 subsequently.
 Employee
Any person other than apprentice,
engaged for hire or reward
Includes supervisors
Includes Managers.
Includes all administrative staff.
Includes a person who has worked not
less than 30 days in an accounting year.
But does not include any person whose
salary exceeds 10000/- pm.
Can a person drawing
wages more than 10000
make a claim?

No. It is not
maintainable under
the Act.
Maximum salary

Employees drawing salary

upto Rs. 10000/- are eligible
for Bonus. But their salary
will be limited to Rs. 3500/-
for the purpose of Bonus.
Max and Min Bonus

Maximum of 20% and

Minimum of 8.33% of the
Salary/ Wages.
Maximum amount of Bonus is
limited to Rs.8400/-
(3500x12x20/100)
Can Bonus be denied to an
employee on the condition
that on the day of
declaration of Bonus he was
not in employment ?
NO.
It violates the provisions of
Sec. 8 of the Act.
Whether a
Probationer is
eligible for
Bonus ?
A probationer will be eligible
for bonus as there is no
exclusion in the definition of
‘employee’ under the Act.
 Forfeiture of
Bonus.
Sec. 9.Bonus can be forfeited to
an employee who has been
dismissed from service on
grounds of fraud, theft,
misappropriation, or sabotage
of any property of the
establishment.