Payment of Bonus Act 1965
Statute requiring payment of annual bonus to eligible employees earning up to INR 21,000 per month, at a minimum of 8.33 percent and maximum of 20 percent of annual wages.
Filing window
Bonus payable within 8 months from the close of the accounting year
Regulator
Ministry of Labour and Employment; state labour departments
Regulator
Ministry of Labour and Employment; state labour departments
Deadline
Bonus payable within 8 months from the close of the accounting year
Penalty
Imprisonment up to 6 months or fine up to INR 1,000 for non-...
Legal basis
Payment of Bonus Act, 1965
What is Payment of Bonus Act 1965?
Statute requiring payment of annual bonus to eligible employees earning up to INR 21,000 per month, at a minimum of 8.33 percent and maximum of 20 percent of annual wages.
- +Every factory and establishment employing 20 or more persons
- +Eligible employees: those who have worked at least 30 working days and earn up to INR 21,000 per month
- +Allocable surplus determines actual bonus percentage between 8.33 and 20 percent
Statutory basis
Payment of Bonus Act, 1965
Enforced by
Ministry of Labour and Employment; state labour departments
Citations are editorially curated. Always verify current applicability with qualified Indian counsel before acting on a specific matter.
The stake
Filing window for Payment of Bonus Act 1965. Skipping or mishandling this compliance carries direct financial and operational consequences.
Why Payment of Bonus Act 1965 matters for your GCC
Payment of Bonus Act 1965 is a payroll and labour requirement for foreign-owned Indian entities and GCCs. Missing the bonus payable within 8 months from the close of the accounting year obligation triggers imprisonment up to 6 months or fine up to inr 1,000 for non-payment; recovery proceedings by authorities, and downstream filings or transactions may be blocked until rectification. Most foreign parents discover Payment of Bonus Act 1965 issues only when a downstream transaction surfaces the prior gap, by which point rectification costs and operational delays have grown materially. Proactive handling avoids these cascading consequences.
The 4 ways Payment of Bonus Act 1965 goes wrong
Real scenarios from real GCC compliance audits. Each one preventable.
Trap 01
Failing to register under Payment of Bonus Act 1965 when the headcount or wage threshold is crossed
Trap 02
Computing contributions or benefits on incorrect wage components
Trap 03
Missing the monthly contribution deadline and triggering interest plus damages
Trap 04
Not updating registration upon change in establishment size, address, or workforce composition
Done for you
Payroll Management
IRPR Network handles Payment of Bonus Act 1965 as part of our Payroll Management service, with timely filings, supporting-document validation, citation tracking, and a zero-penalty compliance calendar.
Our workflow
- 01Identify the trigger event in your GCC operations
- 02Prepare and validate the Payment of Bonus Act 1965 filing or compliance step
- 03Submit to the regulator and obtain acknowledgement
- 04Track in your compliance calendar for ongoing or recurring obligations
Concepts connected to Payment of Bonus Act 1965
These terms are filed together, depend on each other, or share regulatory authority.
Payroll and Labour
Code on Wages 2019
Consolidated central legislation rationalising wage payment, minimum wages, bonus, and equal remuneration across all establishments.
Payroll and Labour
Minimum Wages Act 1948
Central legislation enabling central and state governments to fix minimum wage rates for workers in scheduled employments; being consolidated into the Code on Wages 2019.
Payroll and Labour
EPFO ECR
Monthly EPFO filing combining contribution challan and return; due by 15th of every month.
Asked about Payment of Bonus Act 1965
5 specific questions that GCC operators ask most often, answered with citations to the relevant regulations.
Need help with Payment of Bonus Act 1965?
IRPR Network manages Payment of Bonus Act 1965 as part of Payroll Management, with a zero-penalty guarantee.
Explore the serviceQ01What is Payment of Bonus Act 1965 and who does it apply to?
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Statute requiring payment of annual bonus to eligible employees earning up to INR 21,000 per month, at a minimum of 8.33 percent and maximum of 20 percent of annual wages. For foreign-owned GCCs, Payment of Bonus Act 1965 applies to every factory and establishment employing 20 or more persons. IRPR Network handles Payment of Bonus Act 1965 as part of our Payroll Management service.
Q02When is Payment of Bonus Act 1965 due?
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Payment of Bonus Act 1965 is due bonus payable within 8 months from the close of the accounting year. Late filing triggers imprisonment up to 6 months or fine up to inr 1,000 for non-payment; recovery proceedings by authorities.
Q03What law governs Payment of Bonus Act 1965?
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Payment of Bonus Act 1965 is governed by Payment of Bonus Act, 1965. The compliance is enforced by Ministry of Labour and Employment; state labour departments.
Q04What is the penalty for non-compliance with Payment of Bonus Act 1965?
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Non-compliance attracts: Imprisonment up to 6 months or fine up to INR 1,000 for non-payment; recovery proceedings by authorities IRPR Network's compliance retainer is designed to prevent these exposures through proactive filing, citation tracking, and a defined compliance calendar.
Q05Who handles Payment of Bonus Act 1965 for foreign-owned GCCs in India?
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IRPR Network handles Payment of Bonus Act 1965 end-to-end as part of our Payroll Management service. Our team prepares filings, coordinates with regulators, validates supporting documents, and tracks all related deadlines on a defined compliance calendar.
Handle Payment of Bonus Act 1965 the right way, the first time.
Book a 30-minute consultation. We will map your Payment of Bonus Act 1965 obligations alongside every other India compliance for your GCC, on one calendar, one retainer.
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