Every employee who is drawing a salary or wage up to Rs.10, 000 per, month and who has worked for minimum period of 30 days in a year entitled to be paid bonus.

Every employee drawing salary between Rs 3500/- and Rs 10000/- per month. Bonus payable is to be calculated considering his salary as Rs 3500/- pm.

The wage threshold for determining eligibility of employees has been revised from INR 10,000 to INR 21,000 per month, covering a larger pool of employees.

The calculation ceiling of INR 3500 has now been doubled to INR 7000 per month "or the minimum wage for the scheduled employment, as fixed by the appropriate Government" (whichever is higher).

Bonus to be paid within eight months from the expiry of the accounting year

The employer is bound to pay to his employees every year a minimum bonus of 8.33% of the salary or wage or Rs. 100, whichever is higher, whether he has any allocable surplus or not.

When in any year the allocable surplus exceeds the amount or minimum bonus payable to the employees, the maximum bonus payable by the employer to his employees in that year is 20% of the salary or wage.

Bonus payable under the Act is linked with profits. The employer has to calculate "gross profits" of his establishment in the manner specified in section 4. Then, from "gross profits" so calculated he has to deduct the sums referred to in section 6 as prior charges. The balance is called "available surplus". A percentage of the available surplus calculated in accordance with the provisions of sub-section (4) of section 2 is called "allocable surplus."

Where, in respect of any year the allocable surplus exceeds the amount of minimum bonus payable to the employees' the employer must pay to every employee in respect of that year bonus in proportion to the salary or wage earned by the employee during the year subject to a maximum of twenty per cent of such salary or wage.

Where for any year the allocated surplus exceeds the amount of maximum bonus payable to the employees, then, the excess shall, subject to a limit of twenty per cent of the total salary or wages of the employees, be carried forward for being set on in the succeeding year and so on to be utilised for the purpose of payment of bonus.

Where for any year there is no available surplus, or the allocable surplus in respect of that year falls short of the amount of minimum bonus payable to the employees, and there is no amount or sufficient amount carried forward and set on which could be utilised for the purpose of payment of the minimum bonus, then, such minimum amount or the deficiency, as the case may be, shall be carried forward for being set off in the succeeding year and so on.

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

Imprisonment up to 6 months, or with fine up to Rs 1000/- or with both.