Bonus Payments as per the Payment of Bonus Act

Hi,

As per the bonus act the employer is supposed to pay the bonus within 9 months of completion of Financial Year. In our organisation, we pay an annual bonus to all employees during Diwali who are currently on rolls during that month.
My questions are:

  1. When is the bonus payment supposed to be made to employees who have worked in the preceding financial year? What are the general industry practices?
  2. By definition mentioned in the bonus act, payment of bonus is mandatory for employees whose Basic salaries are less than Rs 7000 per month. But in Maharashtra, minimum wages are much higher than Rs 7000 for many industries. In this light does bonus act become applicable?
  3. What is the statutory requirement for payment of bonus to “White collared” employees as in the Staff cadre?

Thanks and Regards
Vallari

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Hi VallariD,

Yes, you are right, as per the bonus act the employer is supposed to pay the bonus within 9 months of completion of Financial Year which means within Nov 30th you need to pay the bonus and within Dec 31st you need to file the Bonus returns.

  1. Bonus payment you can make min 8.33% to 20% (Max) on Earned Gross. In preceding year also you can pay them min 8.33% to 20% (Max) on Earned Gross.
  2. Mandatory Bonus you need to pay for whom the Basic wage mentioned in Bonus Act. As per present Basic Wage mentioned is "Any employee Basic is = or less than 21000/- is eligible for Mandatory Bonus. Company can decide on paying bonus for whom Basic is more than 21000/-.
  3. There is nothing called “White Collor” employees. You need to see the Basic. If Basic is less than or equal to 21000/- need to pay bonus.

I hope this information will help you.

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Thanks @Arpana

@VallariD we have this content - hope this should help you!

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Thanks for your help @Arpana!

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Thanks for the information. Do you have any document to prove that a bonus can be paid on gross earning? I’m trying but can’t see any gov. doc stating this thing.

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Sure @PujaPatil

Some of these links should help you:

https://labour.gov.in/wageboard/information-payment-bonus-1965#:~:text=The%20Payment%20of%20Bonus%20Act%2C%201965%20provides%20for%20the%20payment,and%20matters%20connected%20there%20with.

**[10.**Payment of minimum bonus. --Subject to the other provisions of this Act, 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 per cent. of the salary of 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:
Provided that where an employee has not completed fifteen years of age at the beginning of the accounting year, the provisions of this section shall have effect in relation to such employees as if for the words “one hundred rupees”, the words “sixty rupees” were substituted.]

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