Section 17 of POB Act, 1965 : Section 17: Adjustment Of Customary Or Interim Bonus Against Bonus Payable Under The Act

Explanation using Example

Imagine a scenario where a company, ABC Corp, celebrates a local festival, Diwali, by giving a 'Diwali bonus' to its employees in October. This bonus is a customary practice and not calculated according to the Payment of Bonus Act, 1965.

Later, when the annual bonus is calculated as per the Act at the end of the financial year in March, ABC Corp can deduct the amount of Diwali bonus already paid from the total bonus amount due under the Act. If an employee received Rs. 2,000 as Diwali bonus and is entitled to Rs. 5,000 as per the Act, the employer can deduct the Rs. 2,000, and the employee would then receive the remaining Rs. 3,000 as the final bonus payout.