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Information on Payment of Bonus, 1965

THE PAYMENT OF BONUS ACT, 1965

The Payment of Bonus Act, 1965 provides for the payment of bonus to persons employed in certain establishments, employing 20 or more persons, on the basis of profits or on the basis of production or productivity and matters connected there with.

The minimum bonus of 8.33% is payable by every industry and establishment under section 10 of the Act. The maximum bonus including productivity linked bonus that can be paid in any accounting year shall not exceed 20% of the salary/wage of an employee under the section 31 A of the Act.

Details of amendments to the Payment of Bonus Act, 1965:
S.No Year of Amendment Eligibility limit (Rs. Per Month) Calculation ceiling (Rs. Per Month)
1. 1965 Rs. 1600 Rs.750
2. 1985 Rs.2500 Rs. 1600
3. 1995 Rs. 3500 Rs. 2500
4. 2007 Rs. 10000 Rs. 3500
5. 2015 Rs. 21000 Rs. 7000 Or the minimum wage for scheduled employment, as fixed by the appropriate Government, whichever is higher.

The last amendment of 2015 was notified on 1st Jan., 2016 and is effective from 1st April, 2014.