26. THE PAYMENT OF BONUS ACT, 1965

This Act makes bonus payment mandatory for every factory (employing ten or more employees) and other establishment employing twenty or more employees. The Central/State Government is empowered to extend the provisions of this Act for any other establishments employing ten or more employees. Every employee receiving salary/wages up to Rs. 5,000/- per month is entitled to bonus for every accounting year. 30 days working condition for employees in that accounting year is necessary to receive bonus. Section-9 of Act details about the conditions which disqualifies a employee to receive bonus. 8.33% of wages/salary is minimum bonus to be paid. Maximum limit is 20%. Bonus is to be paid in cash and within 8 months of closing the accounting year. New establishment are given some relaxations in payment of bonus up to first seven years of their operation.