Current PPT Talks About Payment Of Bonus Act,1965 & It's Important Provisions...

1. Payment Of Bonus Act,1965
By-Subodh Shahare
M.Sc.(Biotech) & M.B.A(HRM)
Indian Institute Of Cost &
Management Studies & Research,
Pune.

2. Introduction
 Payment of Bonus Act,1965 extends to Whole Of India.
 Applicable to every factory where 20 or more persons are employed.
 To be eligible for bonus under the Act minimum 30 days work is necessary.
 Under fraud, misbehaviour charges individual employee will be restricted to
avail the benefits of the Bonus Act,1965.
 Minimum bonus to be paid compulsory by employer or establishments.
 Bonus to be paid in cash within a period of 80 days from the close of an
accounting year.
 If any amount is due to employee as bonus from his employer he can write &
apply to the Government for the recovery of such bonus amount from
employer.[Recovery of Bonus from Employer-Sect.21]
 Such application shall be made within one year from the date on which the
money become due to the employee from the employer.

3. Continued....
 Available Surplus- Net Profit of the company after making
deductions as per Sec 6 of the act.
 Allocable Surplus- Employees’ share in the Available Surplus.
 Minimum Bonus Percentage– 8.33%
 Maximum Bonus Percentage- 20%
 SET ON- When the allocable surplus in a particular year exceeds
maximum bonus(20%) Such amount should be carried forward to
next year to the extent of 20% upto 4 accounting years
 SET OFF- When in a year, to pay minimum bonus there is no
allocable surplus or if it falls short, or no carried forward amount,
then it shall be carried forward t next year with special permission
from the govt. (upto 4 accounting years)

4. Bonus Calculation As Per Bonus Act,1965
I. Every employee drawing salary/wages upto Rs. 10,000 per
month who has worked for not less than 30 days in an
accounting year, shall be eligible for bonus for minimum of
8.33% of the salary/wages.
II. Employees having salary/wages range between Rs. 3500 to Rs.
10,000 per month; for the purpose of payment of bonus, their
salaries/wages would be deemed to be Rs. 3500 ( 2007
amendment)
III. Bonus =3500*12*8.33/100

5. Bonus Calculation In General Cases
 Bonus=Basic Salary+DA*12*8.33%
For Example if Basic salary is 5000 and DA 1000 so ,
Bonus =5000+1000*12*8.33/100
= 6000*12*8.33/100
= 72000*8.33/100
= 5997.6 RS. Annual Bonus
NOTE: The rate will be negotiated and the rate affordable to the
company will be declared

7. THANK YOU!!!