Payment of Bonus Act 1965

Learning Objectives

In this chapter, the students are exposed to the basic knowledge on the Payment of Bonus Act, 1965 covering the following aspects:

  • Application of Bonus Act.

  • Allocable surplus and available surplus.

  • Eligibility for bonus and calculation of days.

  • Minimum and maximum bonus.

  • Set on and set off of allocable surplus.


The practice of paying bonus in India appears to have originated during the First World War when certain textile mills granted 10% of the wages as war bonus to their workers in 1917.

In 1950, the Full Bench of the Labour Appellate evolved a formula for the determination of the bonus. A plea was made to raise that formula in 1959. At the second and the third meetings ...

Get Business Law now with O’Reilly online learning.

O’Reilly members experience live online training, plus books, videos, and digital content from 200+ publishers.