Payment of bonus act

At The Lawtech, we specialize in providing comprehensive services related to the Payment of Bonus Act, ensuring that employers comply with the legal requirements and employees receive their rightful share of annual bonuses. Our team of experts is well-versed in the intricacies of the Act, offering a range of services to facilitate a smooth and transparent bonus payment process.

Payment of Bonus Act 

The Payment of Bonus Act, 1965, is a legislation enacted in India that governs the payment of annual bonuses to employees. The Act aims to ensure that employees receive a share of the profits made by their employers in the form of a bonus. Here’s an overview of the process for payment of bonus under the Payment of Bonus Act:

Eligibility:

1. Employees who have worked for a minimum of 30 working days in an accounting year are eligible for bonus payment under the Act.
2. The Act covers employees working in factories, establishments, and organizations employing 20 or more persons.

Bonus Payment Process:

Determination of Allocable Surplus: The employer determines the allocable surplus for the accounting year by deducting certain statutory amounts from the available surplus.

Set-off and Set-on: The employer can set off any previous losses against the current profits or set on excess available surplus against the deficiency in subsequent years.

Computation of Bonus: The bonus payable to each eligible employee is calculated based on the predetermined bonus percentage and the salary earned during the accounting year.

Time Limit for Bonus Payment: The Act requires the employer to pay the bonus amount within 8 months from the close of the accounting year. If the bonus amount is not paid within this time frame, interest may be applicable.

Bonus Calculation and Payment Statement: The employer prepares a statement showing the computation of bonus for each employee and issues it along with the bonus payment.

Maintenance of Registers: The employer is required to maintain registers and records pertaining to the bonus payments, including details of employees, bonus calculations, and payment details.

Auditing and Compliance: Employers are subject to audits by authorized personnel to ensure compliance with the Act’s provisions. Employers must cooperate with the auditors and provide the necessary documents and information.

Our Payment of Bonus Act Services include:

• Compliance Assessment:
• Bonus Calculation and Documentation:
• Bonus Payment Processing
• Compliance Audits and Due Diligence:
• Dispute Resolution:

Partner with The Lawtech to streamline your bonus payment process, ensure compliance with the Payment of Bonus Act, and enhance employee satisfaction. Our tailored services are designed to meet your organization’s unique needs while navigating the complexities of bonus management.

Contact us today to discuss your Payment of Bonus Act service requirements and let our experts assist you in effectively managing bonus payments and compliance.