Payment of Bonus Act Checklist

This checklist captures the duties employers carry under the Payment of Bonus Act, which requires eligible establishments to share annual profits with lower-wage employees. It covers eligibility thresholds, the minimum and maximum bonus percentages, the allocable surplus and set-on/set-off calculations, and the deadline for disbursing bonus within eight months of the accounting year close. It keeps your annual bonus cycle compliant and documented.

Bonus calculations pull from accounting figures, wage ceilings, and prior-year set-on balances, so mistakes are common when finance and HR work from different assumptions. This checklist aligns both teams on who qualifies, what wage limit applies, and how the minimum eight percent and maximum twenty percent brackets work. It reduces the risk of underpayment claims, inspector notices, and disputes while giving you a clean record for each financial year.

Run it at the end of each accounting year. Confirm the establishment falls within scope, list employees below the eligibility wage ceiling, and calculate bonus on the capped wage. Reconcile the allocable surplus, apply set-on and set-off from previous years, and decide the applicable percentage. Prepare Form C and Form D, disburse within eight months, and file the annual return. Check off each step as it clears.