Section 31: Payment of bonus out of allocable surplus
Reviewed by Finin2min Editorial Desk · Last reviewed 30 August 2026
Requires minimum bonus and, where allocable surplus supports it, additional bonus up to the statutory maximum; contains special rules for newer establishments.
Principal remaining provisions commenced on 21 November 2025 under S.O. 5322(E), read with the earlier partial commencement; check section-specific footnotes in the current India Code text.
Provision / India Code ↗ · Official Act PDF ↗ · 2026 Central Rules ↗
Finin2min analysis — what the section actually does
Operative clauses
- (1) The bonus shall be paid out of the allocable surplus which shall be an amount equal to sixty per cent. in case of a banking company and sixty-seven per cent. in case of other establishment, of the available surplus and the available surplus shall be the amount calculated in accordance with section 33.
- (2) Audited accounts of companies shall not normally be questioned.
- (3) Where there is any dispute regarding the quantum of bonus, the authority notified by the appropriate Government having jurisdiction may call upon the employer to produce the balance sheet before it, but the authority shall not disclose any information contained in the balance sheet unless agreed to by the employer.
Provisos, explanations & qualifications
- No proviso/explanation was separately extracted from this section text.
Thresholds and timelines in the text
- Payment of bonus out of allocable surplus.—(1) The bonus shall be paid out of the allocable surplus which shall be an amount equal to sixty per cent. in case of a banking company and sixty-seven per cent. in case of other establishment, of the available surplus and the available surplus shall be the amount calculated in accordance with section 33.
Actors expressly appearing in the text
Employer, Appropriate Government, Authority / officer
Full statutory text — Section 31
31. Payment of bonus out of allocable surplus.—(1) The bonus shall be paid out of the allocable
surplus which shall be an amount equal to sixty per cent. in case of a banking company and sixty-seven
per cent. in case of other establishment, of the available surplus and the available surplus shall be the
amount calculated in accordance with section 33.
(2) Audited accounts of companies shall not normally be questioned.
(3) Where there is any dispute regarding the quantum of bonus, the authority notified by the
appropriate Government having jurisdiction may call upon the employer to produce the balance sheet
before it, but the authority shall not disclose any information contained in the balance sheet unless agreed
to by the employer.How to apply this provision
- Primary statutory test — (1) The bonus shall be paid out of the allocable surplus which shall be an amount equal to sixty per cent. in case of a banking company and sixty-seven per cent. in case of other establishment, of the available surplus and the available surplus shall be the amount calculated in accordance with section 33.
- Additional operative limb — (2) Audited accounts of companies shall not normally be questioned.
- Numerical or timing control — Payment of bonus out of allocable surplus.—(1) The bonus shall be paid out of the allocable surplus which shall be an amount equal to sixty per cent. in case of a banking company and sixty-seven per cent. in case of other establishment, of the available surplus and the available surplus shall be the amount calculated in accordance with section 33.
- Evidence file — retain facts and records proving the role/status of: Employer, Appropriate Government, Authority / officer.
Rules, forms and cross-references
Direct 2026 Central Rule mapping
Forms mapped
No prescribed form is directly mapped in the current concordance.
Other sections cited in this text
Related Labour Hub resources
A direct concordance is not exhaustive. Central/State jurisdiction, schemes, authority appointments, saved instruments and later notifications may change the practical route without changing the section wording.
Worked example
An employer configuring payroll for payment of bonus out of allocable surplus should first identify the employee and wage period, then apply the exact provision and any linked rule. The system rule should be tested against a sample payslip and bank/payment record. A text point to test is: “Payment of bonus out of allocable surplus.—(1) The bonus shall be paid out of the allocable surplus which shall be an amount equal to sixty per cent. in case of a banking company and sixty-seven per cent. in case of other establishment, of the available surplus and the available ”
Illustration only; it is not statutory text or a substitute for applying the actual facts, jurisdiction, current rule/scheme and official instrument.
Q&A — Section 31
What does Section 31 of the Code on Wages cover?
Requires minimum bonus and, where allocable surplus supports it, additional bonus up to the statutory maximum; contains special rules for newer establishments.
What is the main legal requirement or power in Section 31?
The first operative clause identified from the official text is: “(1) The bonus shall be paid out of the allocable surplus which shall be an amount equal to sixty per cent. in case of a banking company and sixty-seven per cent. in case of other establishment, of the available surplus and the available surplus shall be the amount calculated in accordance with section 33.” Read it with the remaining subsections and any proviso below.
Does Section 31 contain a proviso or explanation?
No standalone proviso or explanation was extracted from this section text. Check the full text below for clause-level qualifications.
What time limit, percentage or amount appears in Section 31?
The provision contains this numerical/time expression: “Payment of bonus out of allocable surplus.—(1) The bonus shall be paid out of the allocable surplus which shall be an amount equal to sixty per cent. in case of a banking company and sixty-seven per cent. in case of other establishment, of the available surplus and the available surplus shall be the amount calculated in accordance with section 33.” Apply it only in the clause and context in which it appears.
Which 2026 Central Rules are linked to Section 31?
No direct Central Rule is recorded in the current concordance. That does not exclude a relevant scheme, notification, State rule or enabling provision.
Is Section 31 currently operative?
Principal remaining provisions commenced on 21 November 2025 under S.O. 5322(E), read with the earlier partial commencement; check section-specific footnotes in the current India Code text.
Source & verification trail
Act: Code on Wages, 2019 — official India Code PDF ↗
Central Rules: Code on Wages (Central) Rules, 2026 — G.S.R. 343(E), 8 May 2026 ↗
Official library: Ministry of Labour & Employment — Labour Codes ↗
Source check: 20 August 2026. Individual professional interpretation should be re-reviewed when the section, rules, notification, scheme, State overlay or controlling judgment changes.