Explain the provision regarding minimum bonus and maximum bonus.

Minimum Bonus (Section 10):

The minimum bonus which an employer is required to pay, even if he suffers losses during the accounting year or there is no allowable surplus, (except in case of new establishment) is :

  • 8.33 % of the salary or wage earned by the employee during the accounting year, or
  • Rs. 100 in case of employees who have completed fifteen years of age and Rs. 60 in the case of employees who have not completed fifteen years of age at the beginning of the accounting year, whichever is higher.

Payment of Maximum Bonus (Section 11):

If, in any accounting year, the allowable surplus, calculated after taking into account the amount ‘set on or the amount ‘set off, exceeds the amount of minimum bonus payable to the employees, the employer is bound to pay bonus to every employee in proportion to the salary or wages earned by the employee during that accounting year. But, bonus shall not exceed 20 % of such salary or wages.

Employees drawing wages or salary upto 10,000 per month or less are eligible to get bonus. But for calculation of bonus payable to an employee,3,500 per month will be taken into account even if employee is drawing upto 10,000 per`month. (Section 12).

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