The Bonus Act, 1965, mandates that eligible employees receive a bonus based on company profits or productivity. Businesses must ensure proper calculation, payment, and documentation of bonuses while adhering to statutory deadlines. Monthly compliance includes maintaining employee records, verifying eligibility, and ensuring timely disbursement. Non-compliance may lead to penalties and legal consequences. Our expert services help businesses streamline Bonus Act compliance, ensuring smooth operations while meeting legal obligations. Stay compliant and avoid risks with our professional assistance!
The Bonus Act mandates that eligible employees receive a bonus based on company profits or productivity, ensuring fair compensation beyond regular wages.
Employees earning a basic salary of up to ₹21,000 per month and who have worked for at least 30 days in a financial year are eligible.
The bonus is calculated as a percentage of wages, typically between 8.33% (minimum) and 20% (maximum) of the employee’s annual salary.
The bonus must be paid within eight months of the financial year’s end, usually before 30th November.
Companies with 20 or more employees and having profits must pay bonuses as per the Bonus Act.
Employers must maintain Form C (Bonus Register) and file Form D (Annual Return on Bonus Paid) with labor authorities.
If a company incurs losses, it is not obligated to pay a bonus; however, if it has surplus reserves, it may still need to comply.
A bonus can be denied if the employee has been dismissed for fraud, misconduct, or absenteeism as per company policy.
Non-compliance can result in fines up to ₹1,000 or imprisonment up to 6 months under the Act.
Businesses should maintain accurate payroll records, file required reports on time, and seek expert legal or compliance support to avoid penalties.
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