{"id":19,"date":"2018-06-05T12:15:38","date_gmt":"2018-06-05T12:15:38","guid":{"rendered":"https:\/\/labourlawadvisor.in\/blog\/?p=19"},"modified":"2024-01-24T12:01:59","modified_gmt":"2024-01-24T12:01:59","slug":"payment-bonus-act-2015","status":"publish","type":"post","link":"https:\/\/labourlawadvisor.in\/blog\/payment-bonus-act-2015\/","title":{"rendered":"Payment of Bonus Act"},"content":{"rendered":"\n<p>We\u2019ve all been in that situation, sitting in our cubicles around Diwali time, waiting anxiously for our bonus. But have you ever wondered about your bonus calculations?&nbsp; And no, your bonus does not depend on how much your boss likes you! In fact, the <a href=\"https:\/\/labour.gov.in\/sites\/default\/files\/ThePaymentofBonusAct1965.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">PAYMENT OF BONUS ACT, 1965<\/a> decides bonuses for a lot of the working population.<\/p>\n\n\n\n<p>In this blog we\u2019ll try to answer some commonly asked questions about bonuses and the bonus act:<\/p>\n\n\n\n<ul><li> What is the bonus act? <\/li><li> How much of a bonus will you get? <\/li><li> Is your company eligible for the bonus act? <\/li><li> Are you eligible for the bonus act? <\/li><li> When do you receive a bonus? <\/li><\/ul>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-662d8c69db8fe\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-662d8c69db8fe\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/labourlawadvisor.in\/blog\/payment-bonus-act-2015\/#THE_PAYMENT_OF_BONUS_ACT\" title=\"THE PAYMENT OF BONUS ACT\">THE PAYMENT OF BONUS ACT<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/labourlawadvisor.in\/blog\/payment-bonus-act-2015\/#The_2015_amendment_of_the_Payment_of_Bonus_Act_added_the_following_clause\" title=\"The 2015 amendment of the Payment of Bonus Act added the following clause:\">The 2015 amendment of the Payment of Bonus Act added the following clause:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/labourlawadvisor.in\/blog\/payment-bonus-act-2015\/#Calculation_of_Bonus\" title=\"Calculation of Bonus\">Calculation of Bonus<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/labourlawadvisor.in\/blog\/payment-bonus-act-2015\/#Bonus_eligibility_2018_for_companies\" title=\"Bonus eligibility 2018 for companies\">Bonus eligibility 2018 for companies<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/labourlawadvisor.in\/blog\/payment-bonus-act-2015\/#Bonus_eligibility_2018_for_employees\" title=\"Bonus eligibility 2018 for employees\">Bonus eligibility 2018 for employees<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/labourlawadvisor.in\/blog\/payment-bonus-act-2015\/#The_maximum_time_by_which_you_should_get_a_bonus_under_the_bonus_act\" title=\"The maximum time by which you should get a bonus under the bonus act\">The maximum time by which you should get a bonus under the bonus act<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"THE_PAYMENT_OF_BONUS_ACT\"><\/span><strong><u>THE PAYMENT OF BONUS ACT<\/u><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In 1965, the government of India implemented the payment of bonus act, which guaranteed a minimum bonus per month to people whose salaries were below a certain limit.<\/p>\n\n\n\n<p>As stated by the Act, \u201c<em>Every employer shall be bound to pay to every employee in respect of the accounting year commencing on any day in the year 1979 and in respect of every subsequent accounting year, a minimum bonus which shall be 8.33 percent of the salary or wage earned by the employee during the accounting year or one hundred rupees, whichever is higher, whether or not the employer has any allocable surplus in the accounting year.\u201d<\/em><\/p>\n\n\n\n<p>This means that 8.33% of your (BASIC + DA) wage is the minimum bonus you are liable to receive, with 20% being the maximum. However, INR 7000 is the maximum calculated bonus. And, your bonus will only be calculated at INR 7000 regardless of whether your salary is INR 10,000.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"576\" height=\"1024\" src=\"https:\/\/labourlawadvisor.in\/blog\/wp-content\/uploads\/2019\/09\/Vertical-Thumbnail-4-576x1024.jpg\" alt=\"\" class=\"wp-image-11631\" srcset=\"https:\/\/labourlawadvisor.in\/blog\/wp-content\/uploads\/2019\/09\/Vertical-Thumbnail-4-576x1024.jpg 576w, https:\/\/labourlawadvisor.in\/blog\/wp-content\/uploads\/2019\/09\/Vertical-Thumbnail-4-169x300.jpg 169w, https:\/\/labourlawadvisor.in\/blog\/wp-content\/uploads\/2019\/09\/Vertical-Thumbnail-4-768x1365.jpg 768w, https:\/\/labourlawadvisor.in\/blog\/wp-content\/uploads\/2019\/09\/Vertical-Thumbnail-4-864x1536.jpg 864w, https:\/\/labourlawadvisor.in\/blog\/wp-content\/uploads\/2019\/09\/Vertical-Thumbnail-4-150x267.jpg 150w, https:\/\/labourlawadvisor.in\/blog\/wp-content\/uploads\/2019\/09\/Vertical-Thumbnail-4-300x533.jpg 300w, https:\/\/labourlawadvisor.in\/blog\/wp-content\/uploads\/2019\/09\/Vertical-Thumbnail-4-696x1237.jpg 696w, https:\/\/labourlawadvisor.in\/blog\/wp-content\/uploads\/2019\/09\/Vertical-Thumbnail-4-1068x1899.jpg 1068w, https:\/\/labourlawadvisor.in\/blog\/wp-content\/uploads\/2019\/09\/Vertical-Thumbnail-4-236x420.jpg 236w, https:\/\/labourlawadvisor.in\/blog\/wp-content\/uploads\/2019\/09\/Vertical-Thumbnail-4.jpg 1080w\" sizes=\"(max-width: 576px) 100vw, 576px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_2015_amendment_of_the_Payment_of_Bonus_Act_added_the_following_clause\"><\/span><strong>The 2015 amendment of the Payment of Bonus Act added the following clause:<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>\u201c<em>Where the salary of the employee exceeds INR 7000 per month, the bonus payable to such an employee shall be calculated as if his\/her salary were INR 7000 or the minimum wage for the scheduled employment as appropriated by the respective government, whichever is higher.\u201d <\/em><\/p>\n\n\n\n<p>Confused? We\u2019ll provide examples ahead, or you could check this video out and learn the calculation of bonus in the excel sheet<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<div class=\"youtube-embed\" data-video_id=\"Cv5CTImuivs\"><iframe loading=\"lazy\" title=\"\u2611\ufe0fPayment of BONUS ACT &amp; amendments | DIWALI bonus calculation in Excel Sheet\" width=\"696\" height=\"392\" src=\"https:\/\/www.youtube.com\/embed\/Cv5CTImuivs?feature=oembed&#038;enablejsapi=1\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen><\/iframe><\/div>\n<\/div><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Calculation_of_Bonus\"><\/span><strong><u>Calculation of Bonus<\/u><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Let\u2019s explain some terms further:<\/p>\n\n\n\n<ul><li><strong>Basic pay:<\/strong> This is the core of the salary, without any extras being added or taken off, such as reductions due to salary sacrifice schemes or increments due to overtime work, etc.<\/li><li><strong>Grade pay:<\/strong> Government employees receive grade pay depending on their position in the government.<\/li><li><strong>Allowance<\/strong>: It is the amount the employee receives in addition to salary, to meet some service requirements such as commute, housing, health, etc.<\/li><li><strong>DA(Dearness Allowance):<\/strong> The DA is a cost of living adjustment to allowance, it is a fraction of your (basic pay + grade pay). It may increase or decrease depending on inflation.<\/li><\/ul>\n\n\n\n<p>Let\u2019s illustrate this with a couple of examples:<\/p>\n\n\n\n<p>1: Assume your basic + DA is INR 5000, then your minimum bonus is 8.33% of 5000, which is 416.5.<\/p>\n\n\n\n<p>2: Assume your basic +DA is INR 8000, and you live in Rajasthan where the minimum wage is INR 5720 per month, then your minimum bonus will be 8.33% of INR 7000.<\/p>\n\n\n\n<p>3: Assume your basic +DA is INR 8000, and you live in Delhi where the minimum wage is INR 13,000 per month, then your minimum bonus will be 8.33% of INR 13,000, this is because the minimum wage is higher than INR 7,000.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Bonus_eligibility_2018_for_companies\"><\/span><strong>Bonus eligibility 2018 for companies<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Now, knowing whether your company is eligible or not is crucial, so if your company has the following criteria then it is eligible:<\/p>\n\n\n\n<ul><li>It should be at least 5 years old.<\/li><li>It should be a profitable company.<\/li><li>There should be a minimum of 20 employees in the company.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Bonus_eligibility_2018_for_employees\"><\/span><strong>Bonus eligibility 2018 for employees<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>But are <strong>you<\/strong> eligible for the bonus? If you satisfy the following criteria, then you are.<\/p>\n\n\n\n<ul><li>You must have a monthly salary of less than INR 21,000 per month.<\/li><li>You must be present at work for at least 30 days a year.<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The_maximum_time_by_which_you_should_get_a_bonus_under_the_bonus_act\"><\/span><strong><u>The maximum time by which you should get a bonus under the bonus act<\/u><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>As per government policy, after the end of every financial year, bonuses are given out for around 8 months. So, in India, where the financial year ends in March, bonuses are usually due around October-November. This is why companies prefer to give them out during Diwali.<\/p>\n\n\n\n<p>We genuinely hope you have learned something new from our blog, and stay tuned for more informative blog posts.<\/p>\n\n\n\n<p>P.I. Jain and Company serves more than 500 companies across India and helps them with their <a href=\"http:\/\/www.esipfadvisor.com\/payroll-processing.php\" target=\"_blank\" rel=\"noreferrer noopener\">payroll processing<\/a> needs and <a href=\"http:\/\/www.esipfadvisor.com\/epf_registration.php\" target=\"_blank\" rel=\"noreferrer noopener\">EPF consultancy.<\/a><br><br>The Labour Law Advisor taught <a href=\"https:\/\/learn.lpt.institute\/s\/store\/courses\/description\/A-to-Z-of-Payroll-Processing\" target=\"_blank\" rel=\"noreferrer noopener\">payroll processing<\/a> to more than 1000+ enthusiasts and helped them to apply their learning practically. <\/p>\n\n\n\n<p><a href=\"https:\/\/labourlawadvisor.in\/blog\/epf-act-amendments-calculation\/\">Know about the EPF Act<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>We\u2019ve all been in that situation, sitting in our cubicles around Diwali time, waiting anxiously for our bonus. But have you ever wondered about your bonus calculations?&nbsp; And no, your bonus does not depend on how much your boss likes you! In fact, the PAYMENT OF BONUS ACT, 1965 decides bonuses for a lot of [&hellip;]<\/p>\n","protected":false},"author":21,"featured_media":11630,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[2257,2254],"tags":[11,12,13,10],"_links":{"self":[{"href":"https:\/\/labourlawadvisor.in\/blog\/wp-json\/wp\/v2\/posts\/19"}],"collection":[{"href":"https:\/\/labourlawadvisor.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/labourlawadvisor.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/labourlawadvisor.in\/blog\/wp-json\/wp\/v2\/users\/21"}],"replies":[{"embeddable":true,"href":"https:\/\/labourlawadvisor.in\/blog\/wp-json\/wp\/v2\/comments?post=19"}],"version-history":[{"count":8,"href":"https:\/\/labourlawadvisor.in\/blog\/wp-json\/wp\/v2\/posts\/19\/revisions"}],"predecessor-version":[{"id":16775,"href":"https:\/\/labourlawadvisor.in\/blog\/wp-json\/wp\/v2\/posts\/19\/revisions\/16775"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/labourlawadvisor.in\/blog\/wp-json\/wp\/v2\/media\/11630"}],"wp:attachment":[{"href":"https:\/\/labourlawadvisor.in\/blog\/wp-json\/wp\/v2\/media?parent=19"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/labourlawadvisor.in\/blog\/wp-json\/wp\/v2\/categories?post=19"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/labourlawadvisor.in\/blog\/wp-json\/wp\/v2\/tags?post=19"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}