The Indian Bonus Act of 1965 provides for the payment of an annual bonus to employees in certain establishments based on profits or productivity. It applies to factories employing 20 or more people and other establishments employing 20 or more people. It entitles eligible employees who have worked for at least 30 days in an accounting year to a minimum of 8.33% of their salary as a bonus and up to a maximum of 20% based on the allocable surplus of the establishment. The Act outlines procedures for calculating bonus amounts and resolving disputes. It also establishes penalties for non-compliance by employers.

1. INDIAN BONUS ACT – 1965