Bonus ceiling increased to Rs.21,000

Bill to amend the Bonus Act – Ceiling now to be raised to Rs.21,000

December 11, 2015

The government has proposed an amendment to the Bonus Act of 1965. In this amendment, the salary ceiling for the payment of bonus is proposed to be increased to Rs.21,000 from the existing ceiling of Rs.10,000. This amendment is proposed to be effective from 1st of April, 2015.

The amendment also seeks to raise the calculation ceiling from current Rs.3,500 to Rs.7,000. This will increase the amount of bonus paid substantially.

This Bill is applicable to every factory or establishment in which a number of 20 or more employees are employed on any day in an accounting year.

The Prime Minister announced that this was a step taken towards improving the welfare of the labour class.

The amendment in the Bonus Act to increase the wage ceiling was one of the assurances which were given by the Centre after ten of the central trade unions went on a one-day strike. The last amendment done in the Bonus Act was in the year 2007 and was made effective from 1st of April, 2006. Even during the last amendment, both eligibility and calculation limit were raised.

The Bill now also provides a new provision in Section 12 which gives the authority to the Central Government to vary the basis for calculation of Bonus.

For more information about Bonus.

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