Bonus Query - What Percentage Of Surplus Should Be Kept?

Dear Seniors,

As per the Bonus Act, if we have a surplus of Rs. 10,00,000, how much should we keep for the Bonus? I think it is 50%, but I don't have a valid document. Kindly suggest.

Dear Seniors,

Are you maintaining Form A & Form B as per the Payment of Bonus Act? If yes, and Rs. 10 Lakh remained as surplus, then you can pay 20% as Statutory Bonus, and keep the rest for future arrangements.

As per the Bonus Act, if we have a surplus of Rs. 10,00,000, how much amount should we keep for the Bonus? I think it is 50%, but I don't have a valid document. Kindly suggest.

Dear Negi ji,

The cap should be 3500 and not 6500.

Your management should decide on the amount of bonus to be given to your employees between 8.33% (statutory minimum bonus) and 20% (statutory maximum bonus) up to a limit of Rs. 3,500/- for employees receiving a maximum salary of Rs. 10,000/- (Basic).

Regards,
Srinivas

Dear Praveen,

I understand that you have an available surplus of Rs. 10,00,000/- in your kitty. Out of this, you may keep 60% of the available surplus as allocable surplus for your bonus purpose, i.e., you can utilize or set aside Rs. 6,00,000/- for the purpose of bonus as per Schedule IV of The Payment of Bonus Act, 1965.

Based on this, you may calculate the bonus for your employees, whether to pay a minimum bonus of 8.33% or a maximum bonus of 20%. Please remember that you may have to pay the minimum bonus even if your allocable surplus falls below the actual bonus payment for your employees, if you are not in the infancy period.

I am enclosing the presentation on The Payment of Bonus Act, 1965 for the information of all readers. I am also enclosing the Fourth Schedule and an extract of The PoB Act, 1965.

Regards,
P. Vathiraj Associate Operations Manager Aparajitha Corporate Services Limited

Dear Sir,

I would like to request clarification on the concept of Allocable Surplus. Could you please explain it in a simple manner along with a definition?

Regards,
M. Sanjay