Hi Seniors,
I would like to know more details on Bonus Act.
1. When does payment of Rs. 3500/- come into effect as minimum bonus amount?
2. The Bonus is actually paid 8.33 percent or max 20 percent. The terms of offset and on set in detail.
3. If the company is into business since 7 to 8 years (profit earning) and only considered Rs. 3500/- as payment of bonus will there be any penalty?
Kindly provide me inputs on the above.
Thanks
Vjaya
From India
2I would like to know more details on Bonus Act.
1. When does payment of Rs. 3500/- come into effect as minimum bonus amount?
2. The Bonus is actually paid 8.33 percent or max 20 percent. The terms of offset and on set in detail.
3. If the company is into business since 7 to 8 years (profit earning) and only considered Rs. 3500/- as payment of bonus will there be any penalty?
Kindly provide me inputs on the above.
Thanks
Vjaya
From India
Dear Vijaya,
1. Minimum bonus raised to Rs. 3500 w.e.f 01.04.2006
2. As per the Bonus Act, minimum is 8.33% and maximum is 20%. If the allocable surplus is below 8.33%, it can be adjusted from the forthcoming 4 years, called Set Off. Similarly if allocable surplus is more than to pay 20%, balance amount upto another 20% can be carried forward to the forthcoming 4 years which is called Set On.
Abbas.P.S
From India, Bangalore
1. Minimum bonus raised to Rs. 3500 w.e.f 01.04.2006
2. As per the Bonus Act, minimum is 8.33% and maximum is 20%. If the allocable surplus is below 8.33%, it can be adjusted from the forthcoming 4 years, called Set Off. Similarly if allocable surplus is more than to pay 20%, balance amount upto another 20% can be carried forward to the forthcoming 4 years which is called Set On.
Abbas.P.S
From India, Bangalore
Thanks Abbas. I still have queries on this. There is no where mentioned in Bare act of Rs. 3500/- .I will check the amendment. 20% is not mandatory..
Minimum bonus is mandatory to my knowledge Nauman.
Thanks,
Vijaya
From India
Minimum bonus is mandatory to my knowledge Nauman.
Thanks,
Vijaya
From India
Dear Vijaya,
In reference to your query, I wish to bring to your knowledge that the upper limit of Rs. 3500/- for the coverage of employees under the payment of Bonus Act,1965 has been enhanced to Rs.10,000/-vide Gazette notification no.50 dated October 27, 2007. A copy of the notification is attached herwewith.
The minimum bonus which an employer is required to pay even if he suffers losses during the accounting year or there is no allocable surplus is 8.33 % of the salary or wages during the accounting year.If in an accounting year, the allocable surplus, calculated after taking into account the amount ‘set on’ or the amount ‘set of’ exceeds the minimum bonus, the employer should pay bonus in proportion to the salary or wages earned by the employee in that accounting year subject to a maximum of 20% of such salary or wages.
For contravention of the provisions of the Act or rules the penalty is imprisonment upto 6 months or fine up to Rs.1000, or both.
BS Kalsi
From India, Mumbai
In reference to your query, I wish to bring to your knowledge that the upper limit of Rs. 3500/- for the coverage of employees under the payment of Bonus Act,1965 has been enhanced to Rs.10,000/-vide Gazette notification no.50 dated October 27, 2007. A copy of the notification is attached herwewith.
The minimum bonus which an employer is required to pay even if he suffers losses during the accounting year or there is no allocable surplus is 8.33 % of the salary or wages during the accounting year.If in an accounting year, the allocable surplus, calculated after taking into account the amount ‘set on’ or the amount ‘set of’ exceeds the minimum bonus, the employer should pay bonus in proportion to the salary or wages earned by the employee in that accounting year subject to a maximum of 20% of such salary or wages.
For contravention of the provisions of the Act or rules the penalty is imprisonment upto 6 months or fine up to Rs.1000, or both.
BS Kalsi
From India, Mumbai
Dear Vijaya,
In the above cited notification (posted by BS Kalsi), section 2 deals with salary for bonus coverage and section 3 with salary for payment. As per this, salary for payment is enhanced from Rs. 2500 to Rs. 3500. Minimum bonus is 8.33% which is the percentage form of 1/12. i.e Minimum bonus is one month salary for 12 months' service.
Abbas.P.S
From India, Bangalore
In the above cited notification (posted by BS Kalsi), section 2 deals with salary for bonus coverage and section 3 with salary for payment. As per this, salary for payment is enhanced from Rs. 2500 to Rs. 3500. Minimum bonus is 8.33% which is the percentage form of 1/12. i.e Minimum bonus is one month salary for 12 months' service.
Abbas.P.S
From India, Bangalore
Dear Vijaya,
If in an accounting year, the allocable surplus, calculated after taking into account the amount ‘set on’ or the amount ‘set of’ exceeds the minimum bonus, the employer is required to pay bonus in proportion to the salary or wages earned by the employee in that accounting year subject to a maximum of 20% of such salary or wages.
If excess allocable surplus remain after paying the maximum bonus of 20% on the wage or salary of the employee, the same shall be carried forward to the next following year to be utilized for the purpose of payment of bonus in case of the shortage of the allocable surplus or losses occur. Similarly when there are no profits (available surplus or allocable surplus) or the amount falls short or deficiency for payment of minimum bonus to employees, such deficienct amount should be adjusted to the current accounting year from the set-on amount, which was carried forward in case of excess allocable surplus in the previous year.
BS Kalsi
From India, Mumbai
If in an accounting year, the allocable surplus, calculated after taking into account the amount ‘set on’ or the amount ‘set of’ exceeds the minimum bonus, the employer is required to pay bonus in proportion to the salary or wages earned by the employee in that accounting year subject to a maximum of 20% of such salary or wages.
If excess allocable surplus remain after paying the maximum bonus of 20% on the wage or salary of the employee, the same shall be carried forward to the next following year to be utilized for the purpose of payment of bonus in case of the shortage of the allocable surplus or losses occur. Similarly when there are no profits (available surplus or allocable surplus) or the amount falls short or deficiency for payment of minimum bonus to employees, such deficienct amount should be adjusted to the current accounting year from the set-on amount, which was carried forward in case of excess allocable surplus in the previous year.
BS Kalsi
From India, Mumbai
Hi All
Below 14 points helps u to understand the Bonus act.
Sr.no Particular Condition
1 No. of employees( Maharastra) 10 No
2 No. of employees (Other) 20 No As per Act
3 Salary component Basic+DA(Special Allowance)
4 Minimum Physical working days in accounting year 30 Days
5 Minimum amount to be paid as bonus Rs.100/-
6 Max.salary(Basic+DA) consider for Bonus calculation Rs.3500/-
7 Max.salary(Basic+DA) consider for Bonus eligibility Rs.10000/-
8 % 8.33% to 20%
9 Max.Amount can be paid as Bonus Rs.8400/-
10 Bonus calculation period April to March
11 Last Date of bonus paid 30th Nov
12 Last Date of bonus paid(Dispute) Within 1 month
13 Final liability of bonus payable if contractor fails to pay Principle
14 Exemption for newly born organization-(Loss making year) 5 years
From India, Mumbai
Below 14 points helps u to understand the Bonus act.
Sr.no Particular Condition
1 No. of employees( Maharastra) 10 No
2 No. of employees (Other) 20 No As per Act
3 Salary component Basic+DA(Special Allowance)
4 Minimum Physical working days in accounting year 30 Days
5 Minimum amount to be paid as bonus Rs.100/-
6 Max.salary(Basic+DA) consider for Bonus calculation Rs.3500/-
7 Max.salary(Basic+DA) consider for Bonus eligibility Rs.10000/-
8 % 8.33% to 20%
9 Max.Amount can be paid as Bonus Rs.8400/-
10 Bonus calculation period April to March
11 Last Date of bonus paid 30th Nov
12 Last Date of bonus paid(Dispute) Within 1 month
13 Final liability of bonus payable if contractor fails to pay Principle
14 Exemption for newly born organization-(Loss making year) 5 years
From India, Mumbai
Hi
There are provisions and benefits for newly formed establishments as well. As per these provisions/benefits, the first five accounting years following the accounting year in which bonus is payable only in respect of the accounting year, in which profits are made.
If any organization did not made profit in 1st year in that case bonus can not be paid, but if in the next year company made profit in financial year organization has to pay Bonus as per act. Again in next year organization does not made profit then, bonus is not payable.( This is applicable only for first 5 years)….After 5th year bonus is payable, whether profit made or not.
From India, Mumbai
There are provisions and benefits for newly formed establishments as well. As per these provisions/benefits, the first five accounting years following the accounting year in which bonus is payable only in respect of the accounting year, in which profits are made.
If any organization did not made profit in 1st year in that case bonus can not be paid, but if in the next year company made profit in financial year organization has to pay Bonus as per act. Again in next year organization does not made profit then, bonus is not payable.( This is applicable only for first 5 years)….After 5th year bonus is payable, whether profit made or not.
From India, Mumbai
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Amendment to Payment of Bonus Act 2015.jpg
Bonus act amendment gazette copy.pdf