Bonus - FAQ

1. Who is eligible to get Bonus?

Every employee who has worked in the establishment for not less than 30 working days in an accounting year is entitled to the bonus. Sec. 8.


2. For which Organisation the Act is applicable ?

It applies to every factory and every other establishment in which 20 or more persons are employed on any day during an accounting year.


3. What is the minimum service to get Bonus ?

Every employee who has worked in the establishment for not less than 30 working days in an accounting year is entitled to the bonus. Sec. 8.


4. What is the Minimum and Maximum amount to be paid as Bonus

Minimum bonus of 8.33%. Maximum bonus of 20% of bonus on the wages earned by an employee in the accounting year.


5. What is Bonus ?

Bonus is annual statutory payment. The minimum bonus is considered deferred wage and any bonus payable in excess of the minimum bonus is a profit sharing.


6. When the Bonus is to be paid

Bonus shall be payable within a period of 8 months from the close of the accounting year.


7. Is Bonus applicable to new Organisation ?

No. New establishments are given infancy protection of 5 years to come under the purview of Bonus Act. However, the new establishments earning profits within the infancy period of 5 years shall pay the bonus for the accounting years in which they earn profits.


8. What is allocable surplus ?

60% of the available surplus in case of Indian companies / stablishments and 67% of the available surplus in case of foreign companies.


9. What are the Registers to be maintained ?

Register in Form A – Computation of allocable surplus.

Register in Form B – Set-on and set-off of allocable surplus.

Register in Form C – Bonus paid to the employees for the accounting year.


10. What is the minimum rate and maximum rate of Bonus to be paid.

Minimum bonus of 8.33%. Maximum bonus of 20% of bonus on the wages earned by an employee in the accounting year.


11. Whether the value of food allowance to be included for calculation of Bonus ?

Yes.


12. Whether Over –time is to be included for the purpose of calculation of Bonus ?

No.


13. What are the components in wages not to be included for calculation of Bonus ?

I) any other allowance which the employee is for the time being entitled to ;

ii) the value of any house accommodation or of supply of light, water, medical attendance or other amenity or of any service or of any concessional supply of food grains or other articles.

iii) any traveling concession;

iv) any bonus (including incentive, production and attendance bonus);

v) any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the employee under any law for the time being in force

vi) any retrenchment compensation or any gratuity or other retirement benefit payable to the employee or any ex-gratia payment made to him.

vii) any commission payable to the employee.


14. Whether an establishment consists of different departments /undertakings
or
branches are to be treated as a same establishment for the purpose of commutation of Bonus ?

Yes.


15. Whether Lay-off period is to be treated as working days?

No.


16. The Accident or maternity benefits are to be treated as working days or not?

No.


17. What are the penalties for non-payment of Bonus?

Any person contravenes the provisions of the Act and the rules made there under shall be punishable with imprisonment for a term which may extend to six months or with fine with may extend to Rs.1000/- or with both.
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