The Payment of Bonus Act, 1965 is enacted to provide for the payment of statutory bonus to persons employed in certain establishments on the basis of profits or on the basis of production or productivity and for matters connected therewith. The Act also provides for minimum bonus and maximum bonus payable to the eligible employees.
The Act is applicable to:
Every factory where in 10 or more persons are employed with the aid of power; or Establishment in which 20 or more persons are employed without the aid of power on any day during an accounting year (Section 1).
Employees drawing wages up to (before amendment - Rs 10000) after amendment Rs 21000 per month. Minimum Bonus is 8.33% of the Salary
Maximum Bonus is 20% of the Salary.CAP for calculating bonus (before amendment - Rs 3500 per month) after amendment Rs 7000 per month or the rate of minimum wages.
whichever is higher An employee will be entitled to get bonus only when he has worked for not less than 30 working days in the relevant accounting year.