Bonus eligibility on minimum wages

The Payment of Bonus Act of 1965 applies to all factories and other establishments that employ at least 20 people. To be eligible for a bonus, employees must meet the following requirements: 

Salary

Employees must earn a salary or wage of up to Rs. 21,000 per month. If an employee's salary is equal to or more than Rs. 7,000 or the minimum wages fixed by the government, the bonus is paid as per the employee's wages. If an employee's salary is less than Rs. 7,000, the bonus is calculated on the actual amount. 

Length of employment

Employees must have worked in the establishment for at least 30 days in a year. 

The minimum bonus is 8.33% of the employee's salary or wages, and the maximum is 20%. The bonus is payable annually within 8 months from the close of the accounting year. 

Employees may be disqualified from receiving a bonus for certain acts, such as: 

Fraud, Violent behavior, Riots, Theft, Misappropriation, and Sabotage of property.