Type:Preventive Compliance Frequency: Annual

Action to be taken:
a) Determine list of employees eligible under the act (those who have worked not < 30 working days in the year, employees other than apprentices on a salary not exceeding Rs 3500 per month and any class of employees listed in Section 32)
b) Remove any employees who have been dismissed from service for fraud, riotous or violent behaviour on the premises or theft, misappropriation or sabotage of property


Audit Requirement:
Have all eligible employees been paid a bonus in the last accounting year ?

Supporting Documents:
Bonus Register

Related Triggers:
Close Of Accounting Year

Related Keywords:
Bonus

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Related Sections:
Payment of Bonus Act, 1965
8:Eligibility for bonus:
Every employee shall be entitled to be paid by his employer in an accounting year, bonus, in accordance with the provisions of this Act, provided he has worked in the establishment for not less than thirty working days in that year.

Payment of Bonus Act, 1965
9:Disqualification for bonus:
Notwithstanding anything contained in this Act, an employee shall be disqualified from receiving bonus under this Act, if he is dismissed from service for-
(a) fraud ; or
(b) riotous or violent behaviour while on the premises of the establishment; or
(c) theft, misappropriation or sabotage of any property of the establishment. Payment of Bonus Act, 1965
12:Calculation of bonus with respect to certain employees:
Where the salary or wage of an employee exceeds seven thousand rupees or the minimum wage for the
scheduled employment, as fixed by the appropriate Government, whichever is higher, the bonus payable to such employee under Section 10 or, as the case may be, under Section 11, shall be calculated as if his salary or wage were ‘‘seven thousand rupees or the minimum wage for the scheduled employment, as fixed by the appropriate Government, whichever is higher. Payment of Bonus Act, 1965
32:Act not to apply to certain classes of employees:
Nothing in this Act shall apply to-
(i) ** the employees employed by the Life Insurance Corporation of India ;
(ii) seamen as defined in clause (42) of Section 3 of the Merchant Shipping Act, 1958 (44 of 1958) ;
(iii) employees registered or listed under any scheme made under the Dock Workers (Regulation of Employment) Act, 1948 (9 of 1948), and employed by registered or listed employers ;
(iv) employees employed by an establishment engaged in any industry carried on by or under the authority of any department of the Central Government or a State Government or a local authority ;
(v) employees employed by-
(a) the Indian Red Cross Society or any other institution of a like nature (including its branches) ;
(b) universities and other educational institutions;
(c) institutions (including hospitals, chambers of commerce and social welfare institutions) established not for purposes of profit ;
(vi) [***] ;
(vii) [* * *]
(viii) employees employed by the Reserve Bank of India ;
(ix) employees employed by-
(a) the Industrial Finance Corporation of India ;
(b) any Financial Corporation established under Section 3, or any Joint Financial Corporation established under Section 3-A, of the State Financial Corporation Act, 1951 (63 of 1951) ;
(c) the Deposit Insurance Corporation ;
(d) The National Bank for Agricultural and Rural Development ;
(e) the Unit Trust of India ;
(f) the Industrial Development Bank of India ;
(fa) the Small Industries Development Bank of India established under Section 3 of the Small Industries Development Bank of India Act, 1989.
(ff) the National Housing Bank ;
(g) any other financial institution (other than a banking company) being an establishment in public sector, which the Central Government may, by notification in the Official Gazette, specify, having regard to-
(i) its capital structure ;
(ii) its objectives and the nature of its activities ;
(iii) the nature and extent of financial assistance or any concession given to it by the Government ; and
(iv) any other relevant factor ;
(x) [* * *]
(xi) employees employed by inland water transport establishments operating on routes passing through any other country.