Statutory Bonus Calculator
Code on Wages, 2019. Enter monthly wages (Basic + DA) for the accounting year.
Pay within eight months of the end of the accounting year — by 30 November for an April–March year. Statutory bonus is taxable as salary. This covers the statutory minimum only; performance or festival bonuses are separate and contractual.
How statutory bonus is calculated
Under the Code on Wages, 2019, which replaced the Payment of Bonus Act from 21 November 2025, statutory bonus works like this:
- Check eligibility. The employee earns wages of up to ₹21,000 a month, has worked at least 30 days in the accounting year, and works in an establishment with 20 or more employees.
- Find the wages to use. If monthly wages are above ₹7,000, bonus is calculated as if the wage were ₹7,000 or the minimum wage, whichever is higher. If wages are below that, the actual wages are used.
- Apply the rate. At least 8.33% and at most 20% of those wages for the months worked, depending on the employer’s allocable surplus.
“Wages” here means basic pay plus dearness allowance, as defined in the Code. HRA, overtime and most allowances are left out, subject to the Code’s 50% rule on excluded allowances.
Worked example
An employee earns ₹18,000 a month in basic pay plus DA and worked the full year. The applicable minimum wage is ₹12,000 a month.
| Step | Result |
|---|---|
| Eligible? (₹18,000 ≤ ₹21,000) | Yes |
| Wages used: higher of ₹7,000 and ₹12,000 | ₹12,000 |
| Minimum bonus: ₹12,000 × 12 × 8.33% | ₹11,995 |
| Maximum bonus: ₹12,000 × 12 × 20% | ₹28,800 |
If the same employee had worked only 7 months of the year, the minimum bonus would be ₹12,000 × 7 × 8.33% = ₹6,997.
When bonus must be paid
Within eight months of the end of the accounting year, credited to the employee’s bank account. For an April–March year, that means by 30 November. Most employers pay it around Diwali, which falls on 8 November in 2026.
Frequently asked questions
Who is eligible for statutory bonus?
Employees earning wages of up to ₹21,000 a month who have worked at least 30 days in the accounting year, in an establishment with 20 or more employees.
Is bonus calculated on the full salary?
No. It is calculated on wages (basic plus DA), and when those are above ₹7,000 a month, on ₹7,000 or the minimum wage, whichever is higher.
Is statutory bonus taxable?
Yes. It is part of salary income and taxed at the employee’s slab rate. The employer deducts TDS on it along with salary.
What is the minimum wage used in the calculation?
The notification refers to the minimum wage fixed by the Central Government. Whether the state minimum wage applies in establishments under state jurisdiction is not settled yet, so check with your state labour department or a labour-law adviser if the two differ.
Read more in What is statutory bonus? In HivePayroll you can pay the bonus through payroll as a one-time earning, so it appears on the payslip and TDS is worked out on it. HivePayroll is free for up to 10 employees.
Based on the Code on Wages, 2019 and the Ministry of Labour notifications of 25 August 2026, as of 27 September 2026. General information, not legal advice.
