Applicability of payment of Bonus Act, 1965

[Sanjay Lakhotia]

Hi - If any organization provides salary in following head , basic, HRA and special allowance. Special allowance paid to all employees. Should we include basic + special allowance under wages to check eligibility of applicability of bonus act.

For example one person getting 15000 as basic and 10000 as special allowance per month, total 25000 , bonus act is applicable to him or not?

[johan kill]

The applicability of the Payment of Bonus Act, 1965, depends on whether the employee's salary falls within the prescribed limit under the Act. Generally, 'wages' for bonus calculation include basic pay and dearness allowance, but special allowance may or may not be included depending on its nature. It’s best to refer to recent legal interpretations or consult a labor law expert for clarity. If anyone has practical insights or recent case references, please share!

AI Summary

Bonus Act applicability hinges on whether special allowance is treated as wages for bonus calculation; characterisation is decisive. Applicability of the Payment of Bonus Act depends on whether components of remuneration qualify as wages for bonus calculation. Basic pay and dearness allowance are generally included, while a uniformly paid special allowance may be included or excluded depending on its legal character and purpose; the question is one of characterisation rather than label, requiring reference to legal tests and authoritative interpretations.