Statutory Bonus Calculator
Statutory bonus under the Code on Wages: who qualifies, how much, and by when.
Month by month
How this was calculated
For general information only, not legal advice. Templates are generic starting points — have a qualified lawyer review anything you rely on.
About the Statutory Bonus Calculator
Statutory bonus is the yearly bonus an Indian employer must pay employees on lower wages. Since the Labour Codes came into force on 21 November 2025 it is governed by Chapter IV of the Code on Wages, 2019, which replaced the Payment of Bonus Act, 1965. Choose the accounting year, enter the monthly wages (the same every month, or month by month) and the minimum wage for the job, and the calculator checks eligibility, applies the wage ceiling, works out the bonus for a full or part year at the rate you choose, and gives the date by which it must be paid.
The minimum is 8⅓% of the wages earned (or ₹100, whichever is higher), whether or not the employer made a profit. The maximum is 20%. Bonus is worked out on wages of at most ₹7,000 a month or the minimum wage, whichever is higher — so the minimum wage you enter can matter more than the actual salary.
How to use it
- Choose the accounting year — April to March — and whether the wages were the same every month or changed month by month.
- Enter the monthly basic pay + DA, and any other pay counted as wages. Add the allowances excluded from wages (HRA, conveyance…) only to apply the 50% rule.
- For a part year, enter the dates worked, or the days paid in each month, and any unpaid days.
- Enter the minimum wage a month for the job (your State’s rate for its zone and skill) and choose the bonus rate — 8⅓% unless the allocable surplus or an agreement gives more.
- Open Limits, deductions and payment to change the ₹21,000 / ₹7,000 limits, deduct a festival or interim bonus already paid, or check a payment date.
- Read the bonus, the notes and how it was worked out, then Copy summary or download the CSV.
Examples
Bonus wages ₹7,000 × 12 = ₹84,000 Minimum bonus 8⅓% = ₹7,000 · maximum 20% = ₹16,800 Pay by 30 November 2026 (for 2025-26)
Bonus wages ₹12,000 × 12 = ₹1,44,000 → minimum bonus ₹12,000
Wages above ₹7,000 count as ₹7,000 or the minimum wage, whichever is higher (s.26(2)).
6 months × ₹7,000 = ₹42,000 → ₹3,500
Not eligible: above the ₹21,000 limit (s.26(1))
Who is entitled
- Every employee drawing wages up to the notified amount a month — ₹21,000, carried over from the Payment of Bonus Act — who has put in at least 30 days’ work in the accounting year (s.26(1)).
- “Wages” is the Code’s definition: basic pay, dearness allowance and retaining allowance, plus any other pay that is not excluded (a special allowance, for example). HRA, conveyance, overtime, commission, employer PF and the other exclusions are not wages — unless together they are more than half of the total pay, when the excess is added back (s.2(y)). The 50% rule can take an employee over the ₹21,000 limit.
- The chapter applies to establishments with 20 or more persons employed on any day of the accounting year (s.41(2)). It does not apply to LIC, establishments under a Government department or a local authority, the RBI, universities and other educational institutions, non-profit hospitals, the Indian Red Cross and the other employers in s.41(1), or to the public sector unless it competes with the private sector (s.40).
- An employee dismissed for fraud, riotous or violent behaviour on the premises, theft, misappropriation or sabotage, or convicted of sexual harassment, gets no bonus (s.29).
How the amount is worked out
Bonus = rate × bonus wages earned in the accounting year
- Rate: at least 8⅓% (s.26(1)), and up to 20% when the allocable surplus — 60% of the available surplus for a bank, 67% for other employers (s.31) — is enough (s.26(3)), or by an agreement linked to productivity (s.26(5)). The total can never be more than 20%.
- Ceiling: when the wage is above ₹7,000 a month, the bonus is worked out as if it were ₹7,000 or the minimum wage, whichever is higher (s.26(2)). With wages of ₹15,000 and a minimum wage of ₹12,000, the bonus wage is ₹12,000 a month.
- Part months count in proportion: monthly wage × days paid ÷ days in the month.
- ₹100 minimum: when 8⅓% of the wages is less than ₹100, ₹100 is paid — reduced in proportion for someone who did not work the whole year (s.27). Lay-off, paid leave, temporary disablement from a work accident and paid maternity leave count as days worked (s.28).
The Code says “eight and one-third per cent” — exactly one twelfth. The old Act said 8.33%, which gives slightly less (₹6,997.20 instead of ₹7,000 on ₹84,000).
Deductions, deadline and disputes
- A puja, festival or other customary bonus, or a part of the bonus paid in advance, is deducted from the bonus for that year (s.37).
- A financial loss caused by misconduct the employee was found guilty of may be deducted, from that year’s bonus only (s.38).
- The bonus is paid by crediting the employee’s bank account within eight months of the close of the accounting year — by 30 November (s.39(1)). The Government may extend this for sufficient reasons, to two years at most.
- When a dispute about the bonus is pending, it is paid within a month of the award or settlement. If the dispute is about a higher rate, 8⅓% must still be paid within the eight months (s.39(2)).
The ₹21,000 and ₹7,000 limits
The Code leaves both amounts to notification by the appropriate Government (s.26(1)–(2)). Until new ones are notified, amounts of wages fixed under the repealed Acts carry over (s.69(2)), and the Government said that during the transition the earlier Acts’ rules and notifications continue. The Payment of Bonus (Amendment) Act, 2015 had set them at ₹21,000 (s.2(13)) and ₹7,000 or the minimum wage, whichever is higher (s.12), from 1 April 2014. Both are editable under Limits, deductions and payment — check for a newer notification for your State or the Centre.
Sources
- Code on Wages, 2019 (India Code) — ss.2(a), 2(y), 26–41 and 69
- Payment of Bonus (Amendment) Act, 2015 (India Code) — the ₹21,000 and ₹7,000 limits
- PIB — the four Labour Codes in force from that date
Limitations
- The allocable surplus (gross profit, depreciation, direct taxes and the set-on and set-off of earlier years) is not worked out: choose the rate your accounts support.
- New establishments pay bonus in their first five accounting years only for a year with a profit (s.26(6)–(8)); that is not modelled.
- When the days worked are left empty, they are estimated as six of every seven paid days — enter the real figure when it is close to 30.
- Months in which the wage rate was above the eligibility limit are left out, following the usual reading of the eligibility rule; a settlement or award may say otherwise.
- The limits and minimum wages come from notifications that change; check them. An estimate for information, not legal advice.
Privacy
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Frequently asked questions
How is statutory bonus calculated?
Bonus = 8⅓% (up to 20%) of the wages earned in the accounting year, where a wage above ₹7,000 a month counts as ₹7,000 or the minimum wage, whichever is higher. For ₹15,000 a month and no higher minimum wage: ₹7,000 × 12 × 8⅓% = ₹7,000.
Is 8.33% the same as 8⅓%?
Almost. The Code on Wages says eight and one-third per cent — exactly one twelfth of the wages. 8.33% (the old Act’s figure) is slightly less: ₹6,997.20 instead of ₹7,000 on ₹84,000 of bonus wages.
Who is not eligible for statutory bonus?
Employees whose wages are above the notified limit (₹21,000 a month until a new amount is notified), anyone who worked fewer than 30 days in the year, employees dismissed for fraud, violence, theft or sabotage or convicted of sexual harassment, and employees of establishments the chapter does not cover — those with fewer than 20 persons, LIC, Government departments and local authorities, most of the public sector, the RBI, universities, non-profit hospitals and others (s.40, s.41).
When must the bonus be paid?
Within eight months of the close of the accounting year — by 30 November for a year ending on 31 March — by crediting the employee’s bank account (Code on Wages, s.39). The Government can extend this, to two years at most.
Does an employee who leaves get the bonus?
Yes, for the wages earned in the year up to leaving, if the other conditions are met. It can be paid with the full and final settlement — the full and final settlement calculator includes it.
Which minimum wage should I enter?
The monthly minimum wage that applies to the employee’s work: the rate your State (or the Centre, for the central sphere) has notified for that kind of employment, zone and skill level. If the State gives a daily rate, use its monthly equivalent.
Is the bonus taxable?
Yes. Statutory bonus is part of salary income and is taxed with the rest of the salary.