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Dynasty Group Pvt. Ltd.

Bonus
• A bonus is usually a financial or monetary compensation which is generally
above and beyond the expectation of the recipient/employee
• The Bonus Act - 1965
• The act regulates the amount to be paid to employees working in certain
establishments based on their Profits and Productivity.
• Why Bonus Act ?
 To make every employer of an establishment which is covered by the act
legally responsible for the payment of Bonus to its employees
 To designate min and max bonus percentage for bonus
 To prescribe formula for calculating bonus
 To act as a grievance redressal forum.

 Bonus is to be paid within 8 months of closing the book of accounts.


 To whom is it applicable?
• Any factory or establishment employing more than 20 persons on any day during
the year
 To whom is it not applicable?
• To the non-profit making organisations.
• To establishments such as LIC, hospitals which are excluded under section 32.
• To establishments where employees have signed an agreement with the employer.
• To establishments exempted by the appropriate government like sick units.
 Eligibility
• An employee who is receiving salaries or wages upto ₹20,000 per month in any
work is eligible for bonus for a year if bonus for every year if the employees have
worked for not less than 30 working days in the same year.
 Calculations

 Penalties
 In case of violation of the provisions under the Act or rules then the penalty is imprisonment
for six months or may impose fine of Rs.1000 or with both.
 In case of failure to comply with the directions or requisitions made the penalty is
imprisonment for six months or may impose fine of Rs.1000 or with both.