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📘 About the Statutory Bonus
Statutory bonus is an annual bonus that employers with 20 or more employees must pay to employees earning up to ₹21,000 a month (basic + DA) who worked at least 30 days in the year. The Payment of Bonus Act 1965 is now part of the Code on Wages 2019 (in force from 21 November 2025), with the same limits confirmed by notifications of August 2026.
The bonus is at least 8.33% and at most 20% of wages, depending on the company's profits (allocable surplus). If your wages are above ₹7,000 a month — or above the minimum wage for your job, if that is higher — the bonus is calculated as if you earned that ceiling.
🧮 Formula
Minimum bonus is 8.33% of wages or ₹100, whichever is higher. It must be paid within 8 months of the end of the accounting year.
✏️ Worked examples
₹18,000, 12 months, 8.33%
You get| Bonus for the year (₹) | ₹6,997.20 |
| Monthly wages used for bonus (₹) | ₹7,000 |
| Average per month (₹) | ₹583.10 |
7,000 × 12 × 8.33% = ₹6,997.20.
Try this example →Same with ₹15,000 minimum wage, 20%
You get| Bonus for the year (₹) | ₹36,000 |
| Monthly wages used for bonus (₹) | ₹15,000 |
| Average per month (₹) | ₹3,000 |
15,000 × 12 × 20% = ₹36,000.
Try this example →🧭 How to use this calculator
What you enter
- Monthly wages (basic + DA, ₹)
- Applicable minimum wage per month (₹, optional)If higher than ₹7,000, bonus is calculated on it.
- Months worked in the year
- Bonus rate (%)Minimum 8.33%, maximum 20%, depending on the company's allocable surplus.
What you get
- Bonus for the year (₹)
- Monthly wages used for bonus (₹)
- Average per month (₹)
💡 Who gets statutory bonus
- Employees with wages up to ₹21,000 a month who worked 30 days or more in the accounting year.
- Establishments with 20 or more employees (factories and notified establishments).
- Not eligible: those dismissed for fraud, violent behaviour, theft or sabotage.
❓ Frequently asked questions
How is statutory bonus calculated?
At least 8.33% of yearly wages, calculated on ₹7,000 a month or the minimum wage, whichever is higher (unless your wages are lower). 8.33% × ₹7,000 × 12 = about ₹7,000 a year.
Who is eligible for bonus?
Employees earning up to ₹21,000 a month (basic + DA) who worked at least 30 days in the year in an establishment covered by the law.
What is the maximum statutory bonus?
20% of wages: with the ₹7,000 ceiling that is ₹16,800 a year; more where the minimum wage is higher.
When must bonus be paid?
Within 8 months of the end of the accounting year — usually before Diwali for April–March companies.