Payment Of Bonus (Amendment) Act, 2015

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Payment Of Bonus (Amendment) Act, 2015 provides for the mandatory annual payment of bonus to eligible employees of establishments which employ 20 or more persons. In accordance with the terms of the Principal Act, every employee who draws a salary of INR 10,000 or below per month and who has worked for not less than 30 days in an accounting year, is eligible for bonus (calculated as per the methodology provided under the Principal Act) with the floor of 8.33% of the  salary payable to him/her and a cap on the maximum bonus statutorily payable (20% of the salary). Apart from seeking to broaden the eligibility limit, (from INR 10,000 set out under the Principal Act, the Amendment Act also raises the calculation ceiling for payment of bonus and retrospectively places the onus on employers to make payment of bonuses to eligible employees effective from 1 April 2014.

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Details of Amendments and Analysis

The Amendment Act has amended the Principal Act in the following manner:

Amendment of Eligibility Limit

By amending Section 2(13) of the Principal Act, the Amendment Act has now widened the scope of employees eligible for payment of bonus from those drawing salary of INR 10,000 per month, to INR 21,000 per month.

The amendment in the eligibility limit appears to be an initiative which forms a part of the Central Government’s pro-labour policy. Interestingly, the last amendment to the eligibility limit was carried out in the year 2007 and over the past decade, the economy has seen significant reforms. These economic reforms have contributed towards an exponential increase in pay-scales making this amendment to the Principal Act very important to the larger populace of the workforce which earns between INR 10,000 and INR 21,000 per month.

Calculation of Bonus




Taking the demands of the trade unions head on, Section 12 of the Principal Act has been amended to state that where the salary or wage of an employee exceeds INR 7,000 per month or the minimum wage for the scheduled employment, the bonus payable to such employee shall be calculated as if his salary or wage were INR 7,000 per month or the minimum wage for the scheduled employment, whichever is higher.

The Principal Act provided that the bonus payable to an employee shall be in proportion to his/her salary. However, where an employee’s salary was over INR 3,500 per month, for the purposes of calculating bonus, the salary was to be assumed to be INR 3,500 per month. With a view to maximise bonus earnings, the Amendment Act has increased the wage ceiling for calculation to INR 7,000 and has also factored in possibilities where the minimum wage payable to such employees may be over INR 7,000, thereby giving employees the flexibility to draw a higher amount as bonus.

How to calculate bonus liability as an employer?

Your liability depends on a number of factors like:

  1. The minimum wages applicable in your state
  2. The number of employees with salaries less than Rs. 10,000
  3. The number of employees with salaries between Rs. 10,000 – Rs. 21,000
  4. The amount of Bonus already paid

We understand that calculating the liability can be a little tricky and we wanted to simplify this process for you.  Hence we’ve created an easy to use calculator that be downloaded by clicking on the link below.



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31 COMMENTS

  1. I worked with a Pvt ltd company dec2011-apr2013 period.my bonus will be getting on Onam festive time that is on sept month of a year.so I forgot to collect or receive my bonus for the last financial year ,I worked with that company.now it’s been after 5years.Will I get that bonus by asking them or do I have the eligibility in rules of govt.coz now it’s been this much years are gone.please help

  5. when an employee is left before receivable of Bonus date. in this case whether he is eligible for the same. any legal rule for this.
    e.g. Employee getting Bonus in the month of March every year and left the company in January…whether the company is liable to give bonus to this employee…

    • As per the Bonus law, company has to pay bonus to all employees who have worked for min. 30 days in a financial year. Company has to send bonus by chq. or electronic transfer of amt.to employees account.

  6. Worked for Pvt Ltd Co. for 8 years (2001 – 2009) and left the organisation on 15 June 2009. Except bonus for 2008-09 have received all my dues. When asked for bonus in 2010 with the then ED – Executive Director (who is no more) while every employee were given bonus, he said that Chairman has decided not to give to employees who have left the organisation, amounting to violation of Section 2(13) of the Principal Act, the Amendment Act. Have no regrets for forgoing but if someone can help getting it now, will donate it to deserving philanthropic institution or NGO in this service. I am sure that my case is strong enough to defend since there is no shortfall from my side else would not have got terminal benefits instantly including PF/Gratuity etc except bonus.

    • As per payment of Bonus Act, 1965, no employer can withhold the bonus of employees. You simply write a letter to the top executive of the company with a copy to the concerned Labour Officer, requesting your employer to release your bonus for the period 2008-2009. If the company had paid bonus to all other employees, they have to pay you also. Send them the request by Registered A.D. post.

  8. Sir my Company name is DIMTS but I Do work by thirt party which is SIS india Ltd which Not Paid any Bounus from 1/04/2017 to Till date 17 /05/2018 ,Now other Company will be come for doing this work ..,I want know who’s responsible of its fraud and who is take responsibility its ??why are not taking action by Government …(Pachar system kab bnd hoga ???)

  9. I am working on jain irrigation system Ltd last 2year and 12-05-2018 in my last day for jain irrigation. I resigned company but company not my last month selary giving. I hope my halp

  11. sir !
    i am working in india post by the rule posts and engagement of 2011
    i get below 10000
    can i get bonus ??
    please help me

  12. Calculation sheet un able to find pl share

    PF consultant
    Connect 2 payroll pvt ltd

  13. Dear sir I’m a working horizon global ltd last 4 year so im eligible. To bonus please confirm

  14. Our company was locked in six months. But any proper notice should not displayed. ACL, DCL Discussed by the management still no solution upto today. No salary and any other wages. Our employees PF amount also deposited in trustees. All employees in poor conditions.

  15. An excellent reform, unfortunately nobody talks about it. The labour unions too are silent. They must appreciate the good reforms while they vehemently oppose what they see as strict laws.

  16. I am working Pvt Company in Pune, But no any rule follow in company
    No PF, No Bonus, No Leave, No Medical Allowance, No Salary Slip, No Identity Card, No increment
    please help me…

  17. Govt rules are there, but there is several companies under proprietor ship and partner ship are not follow Government rules. They have not allowed to take a single leave and mostly trying to run the company with staff on daily wages.
    India Govt has to take necessary steps to increase the EPF pension and an minimum pension should be atleast Rs. 5000 p.m. Govt everytime concentrate to hike salary, wages and pension to the Govt employees only. Change this method and all citizen to get their fundamental / social rights.

  19. Hi,

    i worked for 5.6 years in financial solution company. currently im working another organization. after heard about this i have sent an email to my previous company HR management regarding Payment of Bonus but i did not get any response on this. Could you please advise on this whether i’m also eligiable, if i’m eligiable how to proceed on this.

    Thank you.

  20. Good evening sir I’m working in private company last 2 and half year…I’m getting 10000 salary….

  21. Sir.
    I m from Bangalore, India . I was working at retail but i’m getting only Rs. 9,550 . So, plz help me.

  22. Sir…. I am biju kumar woking in Bajajallianz since last 10 years.. and my salary below 15000 ( take home) and company is profitable this year also… But i will not get bonus this year…. Kindly confirm we will eligible for bonus….
    Tks

  23. If the Pvt Ltd com facing a loss in last two financial year ,then bonus distribution is mendateory for comp. What is celling of salary for bonus ,it will calculate on minimum wages or basic or gross salary. What is minimum AMT of bonus .
    Second ly company is close between the yr then bonus will paid for 6 month or full yr.

  25. i had worked with a Ltd. Co. for 23 years but unfortunately they had not given my bonus last five years, please suggest me what can i do.

  26. I am a government employee since 2003, I was become an officer from 01 September, 2018. Can i am eligible for bonus of five month i.e. April, 2018 to August, 2018. I Yes can you quote any rule.

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