Free tool for employers
Statutory Bonus Calculator (Code on Wages)
Enter one employee's monthly wages. The calculator applies the Rs 21,000 eligibility limit, the Rs 7,000 or minimum wage cap, and the 8.33% to 20% range, and multiplies by your headcount.
Bonus per employee
Rs 6,997
Rs 7,000 base x 12 months x 8.33%
Statutory range
Rs 6,997 to Rs 16,800
8.33% minimum to 20% maximum
Total for 1 employee
Rs 6,997
Due within 8 months of your year end
Bonus base is the lower of actual wages and Rs 7,000 (Rs 7,000 or the minimum wage, whichever is higher). Wages follow the Code on Wages definition, including the 50% add-back of excess allowances. Pro-rata for joiners and leavers. Ex gratia above 20% is not statutory bonus. Check your allocable surplus before paying above 8.33%.
Running bonus in a spreadsheet every October? See how our payroll software handles bonus, PF, ESI and bank files
The statutory bonus formula
Bonus = monthly bonus base x months worked x bonus rate. The monthly bonus base is the lower of the employee's actual wages and the calculation cap. The cap is Rs 7,000 or the minimum wage notified for that employee's category and zone, whichever is higher. The rate is 8.33% at minimum and 20% at maximum.
| Rule | Value |
|---|---|
| Law | Code on Wages, 2019, Chapter IV. It replaced the Payment of Bonus Act, 1965 from 21 November 2025. |
| Establishments covered | 20 or more persons employed on any day in the accounting year |
| Eligible employee | Wages up to Rs 21,000 a month and at least 30 days worked in the year |
| Calculation cap | Rs 7,000 a month or the applicable minimum wage, whichever is higher |
| Minimum bonus | 8.33% of annual bonus wages or Rs 100, whichever is higher |
| Maximum bonus | 20% of annual bonus wages |
| Payment mode | Credit to the employee's bank account |
| Due date | Within eight months of the close of the accounting year |
Source for notifications: Ministry of Labour and Employment. Confirm the minimum wage for each category with your state labour department notification for the period.
Worked examples
Two employees on different salaries can receive the same bonus, because both are paid on the capped base and not on their full wages. The third row shows how a higher state minimum wage raises the cap.
| Employee | Monthly wages | Months | Monthly base used | Bonus at 8.33% | Bonus at 20% |
|---|---|---|---|---|---|
| Shop assistant | Rs 6,500 | 12 | Rs 6,500 (actual) | Rs 6,497 | Rs 15,600 |
| Machine operator | Rs 15,000 | 12 | Rs 7,000 (cap) | Rs 6,997 | Rs 16,800 |
| Machine operator, minimum wage Rs 12,000 | Rs 15,000 | 12 | Rs 12,000 (cap) | Rs 11,995 | Rs 28,800 |
| Helper who joined mid year | Rs 12,000 | 6 | Rs 12,000 | Rs 5,998 | Rs 14,400 |
| Supervisor | Rs 23,000 | 12 | Not eligible | Rs 0 statutory | Rs 0 statutory |
Who is eligible and who is not
- Eligible: any employee on wages up to Rs 21,000 a month who worked 30 days or more in the accounting year, including those who resigned or were hired part way through the year.
- Not eligible: employees above Rs 21,000 a month, and those with fewer than 30 working days in the year.
- Disqualified: an employee dismissed for fraud, violent behaviour at the workplace, theft or sexual harassment.
- Contract workers: they are the contractor's employees for bonus, but the principal employer should check that the contractor pays.
- New establishments: in the first five accounting years, bonus is payable only for years in which the establishment makes a profit.
When to pay 8.33% and when to pay more
8.33% is payable every year, including a loss year. A higher rate depends on the allocable surplus, which is 67% of the available surplus for most companies and 60% for banking companies. If the surplus is more than the amount needed to pay 20%, the excess is carried forward (set on) for up to four accounting years. If it falls short of 8.33%, the shortfall is carried forward (set off) in the same way. Your chartered accountant computes the surplus from the audited figures; payroll only needs the final percentage.
Bonus payment due date by accounting year
The bonus must be credited within eight months of the close of the accounting year. If part of the amount is in dispute, pay the undisputed part on time and keep bank credit proof for each employee.
| Accounting year ends | Last date to credit bonus |
|---|---|
| 31 March | 30 November |
| 30 June | 28 February (29 in a leap year) |
| 30 September | 31 May |
| 31 December | 31 August |
Common mistakes we see in bonus runs
On payroll projects for factories in Metoda, Shapar-Veraval and Aji GIDC near Rajkot, the percentage is rarely the problem. The errors come from the data that feeds it.
- Bonus paid on basic pay only, while the 50% rule adds part of the allowances back to wages. See our guide to the 50% wage rule.
- The Rs 7,000 figure used as the cap although the state minimum wage for the category is higher.
- Employees who left during the year missed from the register even though they crossed 30 days.
- Statutory bonus and ex gratia paid under one payroll head, so the two cannot be separated at inspection.
- Attendance for contract labour kept on a separate device, so the 30 day test is run on incomplete data.
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Frequently asked questions
How is statutory bonus calculated in India?
Statutory bonus is the bonus rate (8.33% minimum, 20% maximum) multiplied by the employee's wages for the accounting year. Each month's wages are capped at Rs 7,000 or the applicable minimum wage, whichever is higher. An employee who earns less than the cap is paid on actual wages.
What is the salary limit for statutory bonus?
An employee whose wages are Rs 21,000 a month or less is eligible, provided they worked at least 30 days in the accounting year. Employees above Rs 21,000 are not owed statutory bonus; anything paid to them is ex gratia.
Is bonus calculated on basic salary or gross salary?
It is calculated on wages as defined in the Code on Wages, which is mainly basic pay, dearness allowance and retaining allowance. If the excluded allowances are more than 50% of total remuneration, the excess is added back to wages, so a salary with a small basic and large allowances has a higher bonus base than basic alone.
What is the minimum and maximum statutory bonus?
The minimum is 8.33% of annual bonus wages or Rs 100, whichever is higher, and it is payable even in a loss year. The maximum is 20%, payable when the allocable surplus supports it. With the Rs 7,000 cap and 12 months worked, that is Rs 6,997 at 8.33% and Rs 16,800 at 20%.
What is the last date to pay statutory bonus?
Bonus must be credited to the employee's bank account within eight months of the close of the accounting year. For an April to March year the last date is 30 November. For a January to December year it is 31 August.
Does an employee who resigned during the year get bonus?
Yes, if they worked at least 30 days in that accounting year. The bonus is pro rata for the months worked and is due at the same time as for current employees.
Is statutory bonus mandatory for a company with fewer than 20 employees?
The bonus chapter applies to establishments that employ 20 or more persons on any day in the accounting year. Smaller establishments can pay a voluntary or customary bonus, which is not statutory bonus.
Is statutory bonus taxable for the employee?
Yes. Bonus is part of salary income in the year it is received, so the employer includes it in the tax deduction calculation for that month.
Related
- HRMS and payroll software for factories, shops and offices
- Attendance management system: the data behind the 30 day eligibility test.
- Diwali bonus 2026: the first bonus season under the Code on Wages, with a Rajkot factory example.
- Payroll compliance checklist for India: PF, ESI and professional tax alongside bonus.
This calculator is a working aid, not legal advice. Thresholds are set by government notification and state minimum wages change twice a year; confirm both before you pay.