What is Bonus? And what is Bonus eligibility?
Bonus is share of profit earned by a organization in a financial year as per Bonus Act 1965.
A sum of money granted or given to an employee, in addition to regular pay , usually appreciation for work done , length of service , accumulated favors , etc. The bonus amount comes from company’s profit. Start up organizations are exempted from Bonus up to 5 years in case they are in loss. Bonus amount is paid , if monthly Basic + D.A is less than equal to 21000.
Bonus Act 1965 is applicable where number of employees , more than 10.
Bonus payment percentage – (i) Minimum payment is 8.33%.
(ii) Maximum payment 20%
Minimum working days is required for bonus eligibility 30 days in a financial year.
Bonus payment last date 30th November following financial year.
Bonus is fully taxable.
Last date of bonus return submission 31st December.
Bonus can be paid on monthly basis or yearly basis , if it is paid on yearly basis , it is pay on next year.
If company pays the Bonus monthly basis then ESIC is applicable.
What is normal Bonus Amount ?
A company sets aside a predetermined amount ,a typical bonus percentage would be 2.5 and 7.5 percent of payroll but sometimes as high as 15 percent, as a bonus on top of base salary. Such bonuses depend on company profits, either the entire company’s profitability or from a given line of profit amount.
Calculation for Bonus payable:
(i) If the Monthly basic salary is equal to or less than 21000 , then bonus will be calculated on the actual amount using formula :
Step 1. minimum wages of state as per employee skill category and 7000 which ever is lower;
Step 2. step 1 and monthly basic salary whichever is lower but Step 2 should not be less than 7000
Monthly Bonus: Step 2 * (20% or 8.33% whichever is applicable as per from B)
Bonus Annual Return Forms –
| INDEX | |
| Rules | Description |
| 1. | Short title and commencement |
| 2. | Definitions |
| 3. | Authority for granting permission for change of accounting year |
| 4. | Maintenance of registers |
| 5. | Annual returns |
| FORM A. | Computation of the allocable surplus under section 2(4) |
| FORM B. | Set-on and Set-off of allocable surplus under section 15 |
| FORM C. | Bonus paid to employees for the accounting year ending on the……….. |
| FORM D. | Annual Return—Bonus paid to employees for the accounting year ending on the …….. |
- Form A – Computation of the Allocable surplus.
- Form B – Set-on and Set-off of Allocable surplus.
- Form C – Bonus paid to employees.
- Form D – Annual Return – Bonus paid to employees.
FORM A
COMPUTATION OF THE ALLOCABLE SURPLUS UNDER SECTION 2 (4)
Name of the establishment………………………… Accounting year ending on the ……………………………
| Gross profit for the Accounting year Rs. | Sums deducted from gross profit | Direct taxes section 6(c) | Further sums as are specified under the Third Schedule to the Act | |
| Depreciation under section 6 (a) | Development rebate or Development allowance Section 6 (b) | |||
| 1 | 2 | 3 | 4 | 5 |
| Total of sums deducted under Column 2,3,4, and 5 | Available surplus for the accounting year(Column 1 minus Column 6) | Amount of allocable surplus @67% (*60% of Column 7) |
| 6 | 7 | 8 |
FORM B
SET AND SET-OFF ALLOCABLE SURPLUS UNDER SECTION 15
| Accounting year | Amount allocable as bonus | Amount payable as bonus (in Rs.) | Amount of set on or set-off (in Rs.) | Total set-on or set-off carried forward (in Rs.) |
| 1 | 2 | 3 | 4 | 5 |
FORM C
BONUS PAID TO EMPLOYEES FOR THE ACCOUNTING YEAR ENDING ON THE ……………………………….
Name of the establishment ……………………………….
No. of working days in the year ………………………..
| Sl. No. | Name of the employee | Father’s name | Whether he has completed 15 years of age at the beginning of the accounting year | Designation | No. of days worked in the year | Total salary or wage in respect of the accounting year | Amount of bonus payable under section 10 or section 11 as the case may be |
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| Puja bonus or other customary bonus during the accounting year | Interim bonus of bonus paid advance | Deductions | Net Amount Payable (Column 8 minus Column 12) | Amount actually paid | Date on which paid | Signature/thumb impression of the employee | ||
| [Amount of income-tax deducted] | Deduction on account of financial loss, if any, caused by misconduct of employee | [Total sum deducted under columns 9, 10, 10A and 11] | ||||||
| 9 | 10 | [10A] | 11 | 12 | 13 | 14 | 15 | 16 |
Form D
ANNUAL RETURN- BONUS PAID TO EMPLOYEES FOR THE ACCOUNTING YEAR ENDING ON THE …………………
1. Name of the establishment and its complete postal address:…………………………. ………………………………………………………………………………………….. …………………………………………………………………………………………..
2. Name of industry:……………………………………………………………………….
3. Name of the employer:………………………………………………………………….
4. Total number of employees:…………………………………………………………….
5. Number of employees benefited by bonus payments:………………………………….
| Total amount payable as bonus under section 10 or 11 of the Payment of Bonus Act, 1965 as the case may be | Settlement, if any, reached under section 18 (1) of 12 (3) of the Industrial Disputes Act, 1947 with date | Percentage of bonus declared to be paid | |||
| 1 | 2 | 3 | |||
| Total amount of bonus Actually paid | Date on which payment made | Whether bonus has been paid to all the employees, if not, reasons or non-payment | Remark | ||
| 4 | 5 | 6 | 7 | ||
Signature o
https://hrylabour.gov.in/staticdocs/labourActpdfdocs/Payment_of_Bonus_Rules.doc
LINK OF BONUS FORM DOWNLOAD 👆
THANKS FOR READING.
Rupa Banerjee – Payroll Editor.
Email : rupabanerjee70@gmail.com