The Payment of Bonus Act, 1965 was introduced to provide employees with a statutory right to receive bonuses based on profits, productivity, and organisational performance. The Act played an important role in promoting fair profit-sharing between employers and employees and maintaining industrial harmony. However, with labour law reforms, the bonus-related provisions of this Act have now been incorporated into the Code on Wages, 2019.
What is the Payment of Bonus Act, 1965?
The Payment of Bonus Act, 1965 was a major labour law that regulated the payment of annual bonuses to eligible employees working in covered establishments. It aimed to ensure that workers received a share of the organisation’s profits and were rewarded for their contribution.
The Act provided clear rules regarding bonus eligibility, calculation, payment timeline, and dispute resolution. It helped create a balance between employee welfare and employer obligations.
- Enacted by the Indian Parliament in 1965.
- Came into force on 20 December 1965.
- Provided statutory bonus rights to eligible employees.
- Applied to factories and establishments meeting prescribed conditions.
- Promoted better employer-employee relations.
Download UPSC EPFO APFC Payment of Bonus Act, 1965 Quiz PDF
The UPSC EPFO APFC Payment of Bonus Act, 1965 Quiz PDF is useful for revising important concepts related to bonus provisions, applicability, eligibility criteria, minimum and maximum bonus, calculation of bonus, accounting year, and key provisions under the Code on Wages, 2019.
| Particulars | Link |
| Payment of Bonus Act, 1965 Quiz PDF | Download Now |
| UPSC EPFO APFC Previous Year Papers | Download Now |
| UPSC EPFO APFC Practice Notes PDF | Check Details |
Attempt UPSC EPFO APFC Payment of Bonus Act, 1965 Quiz
Test your preparation with the UPSC EPFO APFC Payment of Bonus Act, 1965 Quiz and revise important concepts such as bonus eligibility, minimum and maximum bonus limits, employee coverage, accounting year, bonus calculation, and updated provisions under the Code on Wages, 2019.
1. The Payment of Bonus Act, 1965 was enacted primarily to provide for:
2. The Payment of Bonus Act, 1965 was enacted as:
3. On which date was the Payment of Bonus Act, 1965 enacted?
4. Historically, the Payment of Bonus Act, 1965 generally applied to every factory and to every other establishment employing at least:
5. Under the old Act, the appropriate Government could extend its application to establishments employing fewer than 20 persons, but not fewer than:
6. Once the Payment of Bonus Act, 1965 became applicable to an establishment, what happened if employment later fell below the normal threshold?
7. Under the definition in the Payment of Bonus Act, 1965, which category was excluded from the term “employee”?
8. Immediately before repeal of the 1965 Act, the monthly salary or wage ceiling in the definition of “employee” for statutory bonus eligibility was:
9. Under Section 8 of the Payment of Bonus Act, 1965, an employee had to work for at least how many working days in the accounting year to become eligible for bonus?
10. Which of the following was a statutory ground of disqualification from bonus under Section 9 of the 1965 Act?
11. Which conduct was specifically covered by Section 9 of the old Act?
12. Which statement correctly describes the minimum bonus under Section 10 of the 1965 Act in its later form?
13. Historically, if an employee had not completed 15 years of age at the beginning of the accounting year, the monetary amount substituted for ₹100 in Section 10 was:
14. The maximum statutory bonus under Section 11 of the Payment of Bonus Act, 1965 was:
15. The maximum bonus became relevant under the old Act when:
16. After the 2015 amendment, Section 12 of the old Act required bonus for an eligible employee earning above the calculation ceiling to be computed on:
17. An employee earned ₹18,000 per month when the old Act applied, and the applicable minimum wage was ₹9,000. What monthly figure would Section 12 use for bonus calculation after the 2015 amendment?
18. Under the old Act, the ₹21,000 figure and the ₹7,000/minimum-wage figure represented, respectively:
19. Under Section 13 of the old Act, the minimum bonus could be proportionately reduced when:
20. For computing working days under the old Act, which of the following could be treated as a day worked?
Quiz Summary
Sign Up
Or, register with email
Email Id
Mobile Number
Password
Login
Email Id
Password
Forgot Password
Please enter the Email ID we will send you a Email with the link to reset the password.
Email Id
Or, login with
Why was the Payment of Bonus Act introduced?
Before this Act, bonus payments were mostly based on voluntary practices or agreements between employers and employees. Many workers did not receive benefits even when their contribution helped organisations earn profits. The Act was introduced to create a uniform system for bonus payment and ensure that employees received a fair share of organisational success.
| Objective | Details |
| Employee welfare | Provides financial support through statutory bonus payments |
| Profit sharing | Allows employees to receive a share of profits |
| Productivity improvement | Encourages employees to improve performance |
| Industrial peace | Reduces disputes between employers and workers |
What is the latest update on the Payment of Bonus Act, 1965?
The Payment of Bonus Act, 1965 has been subsumed under the Code on Wages, 2019. The Code on Wages combines four wage-related laws, including the Payment of Bonus Act, 1965, into a single framework.
The bonus provisions are now covered under Chapter IV – Payment of Bonus of the Code on Wages, 2019. The core provisions related to bonus eligibility, minimum bonus, maximum bonus, and payment timelines continue under the new framework.
| Earlier Law | Current Position |
| Payment of Bonus Act, 1965 | Subsumed under Code on Wages, 2019 |
| Bonus provisions under the Act | Covered under Chapter IV of Code on Wages |
| Separate bonus legislation | Consolidated into wage code framework |
What are the key provisions related to bonus under Code on Wages, 2019?
The Code on Wages, 2019 continues the major provisions of the Payment of Bonus Act while bringing them under a consolidated wage law framework.
| Provision | Details |
| Eligibility for bonus | Employees who have worked for at least 30 days in an accounting year are eligible, subject to the notified wage limit |
| Minimum bonus | 8.33% of wages earned or ₹100, whichever is higher |
| Maximum bonus | Maximum bonus payable is 20% of wages |
| Payment period | Bonus must generally be paid within 8 months from the end of the accounting year |
| Calculation basis | Bonus is calculated according to the provisions related to wages and allocable surplus |
Who is covered under the bonus provisions?
The bonus provisions apply to eligible employees working in covered establishments and meeting the prescribed wage and service conditions.
- Employees working in eligible factories and establishments.
- Employees who have completed at least 30 days of work in an accounting year.
- Employees falling within the wage limit notified by the appropriate government.
What are the important definitions under the Act and Code?
Understanding key terms helps candidates prepare labour law topics effectively for exams like UPSC EPFO APFC and EO/AO.
| Term | Meaning |
| Employee | A person employed in an establishment who meets eligibility conditions |
| Establishment | Factory, organisation, or workplace covered under labour law provisions |
| Accounting Year | Period used for calculating profits and bonus |
| Bonus | Additional payment given to eligible employees based on statutory rules |
What is the importance of bonus provisions in labour laws?
Bonus provisions play an important role in protecting employee interests and ensuring fair compensation practices. They encourage workers by connecting rewards with organisational performance.
- Provides additional financial support to employees.
- Encourages better productivity and performance.
- Helps maintain industrial harmony.
- Reduces disputes related to profit sharing.
- Supports employee welfare and economic security.
How is the Payment of Bonus Act important for UPSC EPFO preparation?
The Payment of Bonus Act is an important topic under the Labour Laws section of UPSC EPFO APFC and EO/AO exams. Candidates should understand both the historical Act and its latest position under the Code on Wages, 2019.
- Payment of Bonus Act introduced in 1965.
- Subsumed under Code on Wages, 2019.
- Bonus provisions are covered under Chapter IV.
- Minimum bonus: 8.33%.
- Maximum bonus: 20%.
- Minimum working requirement: 30 days in an accounting year.
FAQs
The Payment of Bonus Act provided statutory bonus rights to eligible employees based on profits and productivity.
No, its provisions have been incorporated into the Code on Wages, 2019.
Chapter IV of the Code on Wages, 2019 deals with payment of bonus.
The minimum bonus is 8.33% of wages earned or ₹100, whichever is higher.
An employee must work for at least 30 days in an accounting year.
- Attempt UPSC EPFO APFC Indian Economy Conceptual & Numerical Quiz
- Attempt UPSC EPFO APFC Computer Applications Quiz & Download PDF
- UPSC EPFO APFC Code on Social Security 2020 Quiz & Free PDF
- Attempt UPSC EPFO APFC Insurance Practice Quiz & Download PDF
- Attempt UPSC EPFO APFC Auditing Practice Quiz & Download PDF
- UPSC EPFO APFC Marks vs Cut-Off, How to Calculate Your Score?
Hi, I’m Aditi. I work as a Content Writer at Oliveboard, where I have been simplifying exam-related content for the past 4 years. I create clear and easy-to-understand guides for JAIIB, CAIIB, and UGC exams. My work includes breaking down notifications, admit cards, and exam updates, as well as preparing study plans and subject-wise strategies.
My goal is to support working professionals in managing their exam preparation alongside a full-time job and to help them achieve career growth.