Applicability of Act

Every factory where in 10 or more persons are employed with the aid of power or An establishment in which 20 or more persons are employed without the aid of power on any day during an accounting year. Establishment includes Departments, undertakings and branches, etc.

Eligibility of Bonus

• Employee whose Salary/ Wages does not exceed Rs 21,000 per month
• who has worked in the establishment for not less than 30 days
• Not disqualified to claim bonus due to fraud, theft or any other misconduct
• Bonus of very person drawing salary as per minimum wage for the scheduled employment, as fixed by the appropriate Government. Scheduled Employment’’ mean as assigned to it in section 2(g)[7]of the Minimum Wages Act, 1948

Components of Bonus 

Salary or wages includes Dearness Allowance but no other Allowances e.g. Over-Time, House Rent, Incentive or Commission.

Rate of Bonus 

• Minimum 8.33% of Salary/Wages
• Maximum 20% of Salary/Wages
• Computation of bonus as per Schedule I to IV of the Act.
• Adjust any interim bonus paid while making payment of the final bonus.

Dispute of Bonus

The Bonus Act does not provide for any machinery to resolve disputes relating to bonus. For this, the Industrial Dispute Act shall be referred to.