The Act is applicable to Factory and Establishment employing not less than 20 person or any day during an Accounting Year.Since Labour and Capital were necessay for the earnings of an industry, the labour should get some benefit out of the surplus earning after deducting centrain charges like return on paid up capital and working Capital, Depreciaiation, and Income Tax.

Any surplus left over after such deduction as above amy given to employees as Bonus . The Act feine Allocable Surplus, Available Surplus, Computatiuon of available surplus, Computaton of gross profets, Direct Tax calculation.

If the employer has allocable surplus, then the minimum amount of Bonus payable is 8.33% and incase the allocable surplus eceeds, the bonus payable is upto 20%. Whether the Employer gets profit or not, bonus is payable and thus Bonus has become an implied term of employment not depending on profit.

The Nonus Act furthe provides time limit for payment of Bonus to workmen, submission of Annual Return to the authoris and maintaining Register A, B,C and D. For contravention of any provisions of this act the penalty is imprisonment upto 6 months or with fine.