PAYMENT OF BONUS ACT

1965
Objective
• To improve statutory liability to pay
bonus [reward for good work]
• To prescribe formula for calculating
bonus
• To prescribe Minimum & Maximum
percentage bonus
• To provide of set off/set on
mechanism
• To provide redressal mechanism 1
 IM
COVERAGE - Every Factory [as defined
in Factories Act 1948]
Continues even if number falls below
20
MONTHLY WAGES CEILING - Rs.
3,500/- pm [has worked Minimum 30
days` in the year]
DISQUALIFICATION - Fraud
Theft, misappropriation
Causing loss, Damage, Riot 2
 COMPUTATION OF BONUS
Available Surplus = GP – (Income
Tax + Depreciation)
Allocable Surplus = 60% of Available
Surplus
Max. Bonus = 20% of Salary/Wages
Min. Bonus = 8.33% of Salary/Wages
Set on and set off permissible for 4
yrs
Deductions from Bonus –
Loss/damage cause; Customary bonus
3
Forfeiture – Fraud; Riot/Violent