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Bonus Eligibility & Calc

Bonus payable under the Code on Wages, 2019.

The Bonus Eligibility and Calculation tool computes statutory bonus under the Payment of Bonus Act, 1965, now subsumed by the Code on Wages, 2019. Employees drawing wages up to Rs 21,000 a month are eligible, and bonus is calculated on wages of up to Rs 7,000 a month or the applicable minimum wage, whichever is higher, at 8.33% to 20%. It is for employers, payroll teams and employees checking bonus eligibility and the amount payable.

Use the Bonus Eligibility & Calc

Bonus Computation

Wages for bonus (capped at Rs 7,000 or min wage, whichever is higher)₹ 0
Months worked0
Bonus rate8.33%
Annual Bonus Payable₹ 0
Eligibility: wages up to Rs 21,000/month (S.O. 4711(E), 25 August 2026). Calculation ceiling: Rs 7,000/month or the applicable minimum wage, whichever is higher (S.O. 4710(E), 25 August 2026). Both are deemed in force from 21 November 2025 under Section 26 of the Code on Wages, 2019.

Generated on 16 October 2026 at skagandassociates.com — for information only, not professional advice

Compute statutory bonus under the Payment of Bonus Act, 1965 (now subsumed by the Code on Wages, 2019 from 21 November 2025). Mandatory bonus: minimum 8.33%, maximum 20% of qualifying wages.

Bonus rules:
  • Eligibility: Employees drawing wages up to Rs 21,000/month (S.O. 4711(E), 25 August 2026, deemed effective 21 November 2025) and who worked for at least 30 days in the accounting year.
  • Coverage: Factories and other establishments employing 20 or more persons (10 in certain states).
  • Minimum bonus: 8.33% of wages or Rs 100, whichever is higher.
  • Maximum bonus: 20% of wages, subject to allocable surplus / set-on / set-off mechanism.
  • Calculation base: Where wages exceed Rs 7,000/month, bonus is calculated as if wages were Rs 7,000 or the minimum wage fixed by the appropriate Government, whichever is higher (S.O. 4710(E), 25 August 2026, for the Central sphere).
  • Payment timeline: Within 8 months of FY closure (i.e., by 30 November typically).
  • Disqualification: Dismissal for fraud, riotous behaviour, theft (Sec 9).
  • Set-on / Set-off: Allocable surplus above 20% must be set on (max 20% bonus equivalent); shortage below 8.33% can be set off against future years.
Important note: This tool provides an indicative output only. It does not factor in every special provision, surcharge, exception, or recent notification. Verify with the firm before acting on any computation.

Frequently Asked Questions

Who is eligible for statutory bonus?
Employees drawing wages of up to Rs 21,000 a month (notification S.O. 4711(E) dated 25 August 2026, deemed effective from 21 November 2025) who have worked at least 30 days in the accounting year are eligible, in establishments employing 20 or more persons (10 in certain states). An employee dismissed for fraud, riotous behaviour or theft can be disqualified. The Payment of Bonus Act is now subsumed in the Code on Wages, 2019.
What is the minimum and maximum statutory bonus?
The minimum statutory bonus is 8.33% of wages or Rs 100, whichever is higher, and the maximum is 20% of wages, depending on the allocable surplus under the set-on and set-off mechanism. Bonus is to be paid within 8 months of the close of the financial year, which is typically by 30 November.
How is bonus calculated in this tool?
The tool caps monthly wages at Rs 7,000 or the minimum wage you enter, whichever is higher, multiplies the capped wages by the months worked, and applies the bonus rate you choose between 8.33% and 20%, subject to the Rs 100 minimum. If monthly wages exceed Rs 21,000, it shows the employee as not eligible. The ceiling follows notification S.O. 4710(E) dated 25 August 2026.

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Full compliance calendar → Statutory dates, which can be extended by notification. General information only.

Published by SKAG and Associates, Chartered Accountants, New Delhi · Proprietor CA Gaurav Singh (ICAI M.No. 539050). General information only, not professional advice.

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