Short Essay on Payment of Bonus – The employees or workers during their employment, not only receive wages, salary, house rent allowance, medical benefits, education allowance for their children, but also the ex-gratia payment in the form of bonus.
The bonus is paid on the basis of profits or on the basis of production or productivity. All factory workers are eligible for bonus and so are the workers of such other establishments that employ twenty or more persons.
If the bonus is paid on the basis of gross profit, the gross profit has to be calculated in accordance with the provisions under the Payment of Bonus Act.
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The employees who are employed on a salary or wage not exceeding ten thousand rupees per month and have worked for more than 30 days in an accounting year are eligible for bonus at the rate of a minimum of 8.33% of his yearly salary or wages, even if there is a loss incurred by the employer. The employees of the certain public sector or government sector undertakings are also eligible for bonus.
Bonus is actually a kind of incentive to motivate the employees to work better and thereby increase the productivity and profitability of an establishment.