Statutory Bonus Calculator (Payment of Bonus Rules, 2026)
Enter monthly wages, the applicable minimum wage, months and days worked and the bonus rate. See whether the employee is eligible, the wage the bonus is worked on, and the bonus.
Bonus is worked on ₹7,000 or this, whichever is higher. Leave 0 if not known.
Result
- Wages for bonus (a month)
- ₹12,000.00
- Rate
- 8.33%
- Statutory bonus
- ₹11,995.20
Wages above the calculation ceiling — bonus is worked on the ceiling, not the actual wages.
Quick answer
Statutory bonus = Wages for bonus × Months worked × Rate. Employees earning up to ₹21,000 a month who worked at least 30 days in the year are eligible. Bonus is calculated on actual wages or ₹7,000 a month (or the minimum wage, if higher), whichever is lower, at a minimum of 8.33% (or ₹100) and a maximum of 20%.
| Eligible | Wages up to ₹21,000 a month |
|---|---|
| Calculated on | ₹7,000 or minimum wage, if higher |
| Minimum bonus | 8.33% or ₹100 |
| Maximum bonus | 20% |
| Minimum work | 30 working days in the year |
| Law | Code on Wages, 2019 (replaced the Payment of Bonus Act, 1965) |
The Payment of Bonus Act, 1965 was replaced by the Code on Wages, 2019 on 21 November 2025, but the idea is the same: employees below a wage limit are entitled to a yearly bonus of at least 8.33% of their wages, and up to 20% when the employer's allocable surplus allows.
On 25 August 2026 the Ministry of Labour notified the two figures that decide the bonus — the eligibility limit of ₹21,000 a month and the calculation ceiling of ₹7,000 or the minimum wage — with effect from 21 November 2025. Rates and limits as of 13 October 2026.
The formula
- Eligible
Monthly wages ≤ ₹21,000 and ≥ 30 working days- Wages for bonus
Lower of actual wages and max(₹7,000, minimum wage)- Bonus
Wages for bonus × Months × Rate (8.33% to 20%)
A worked bonus calculation
A worker earns ₹18,000 a month and worked all 12 months. The applicable minimum wage is ₹12,000 a month, which is higher than ₹7,000, so bonus is calculated on ₹12,000. At the minimum rate: 12,000 × 12 × 8.33% = ₹11,995.20. At the maximum rate of 20%: ₹28,800.
A colleague earning ₹22,000 a month gets no statutory bonus, because wages are above ₹21,000 — though the employer may still pay one by choice or agreement.
What counts as wages for bonus
Wages under the Code on Wages are basic pay, dearness allowance and retaining allowance; allowances excluded from wages are added back to the extent they exceed half of total pay. Overtime, bonus itself and employer contributions to PF are not wages.
Because the Code's definition differs from the old Act's, recheck salary structures with a low basic: the eligibility and the bonus can both change.
Between 8.33% and 20%
The minimum bonus is payable whether or not the business made a profit. Above that, the rate depends on the allocable surplus — a share of the year's available surplus worked out from the profit and loss account. Many employers simply pay 8.33% to eligible staff and set the rate higher in good years.
Questions people ask.
Who is eligible for statutory bonus?
Employees whose wages are up to ₹21,000 a month and who worked at least 30 days in the accounting year.
How is bonus calculated?
Bonus = wages for bonus × months worked × rate. Wages for bonus are actual wages or ₹7,000 (or the minimum wage, if higher), whichever is lower.
What is the minimum and maximum bonus?
Minimum 8.33% of wages or ₹100, whichever is higher; maximum 20%.
Is the Payment of Bonus Act still in force?
No. It was replaced by the Code on Wages, 2019 from 21 November 2025. The Code keeps the 8.33%–20% bonus; the wage limits were notified on 25 August 2026.
Is bonus payable if the company made a loss?
Yes, the minimum bonus of 8.33% is payable to eligible employees even in a loss year.
Is statutory bonus part of CTC?
Employers often show it in CTC, but it is a statutory payment for eligible employees whether or not it is written into the offer.
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