Sleet

Statutory Bonus in India: Eligibility, Calculation and Due Dates

Nihit Dobariya
Compliance
6 min read
Quick answer

Statutory bonus is now governed by the Code on Wages, 2019, which absorbed the Payment of Bonus Act, 1965 on 21 November 2025. Limits are unchanged: employees earning up to ₹21,000 a month who worked 30 days qualify, the bonus is 8.33 to 20 percent of wages capped at ₹7,000 or the minimum wage, and it is due within eight months of year-end.

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Statutory bonus is a yearly payment that eligible employees receive. Since the labour codes came into force on 21 November 2025, it is governed by the Code on Wages, 2019, which brought the Payment of Bonus Act, 1965 into a single code. The limits did not change: eligibility up to ₹21,000 a month and calculation on ₹7,000 or the minimum wage, whichever is higher. To work out an amount, use the statutory bonus calculator.

Key points covered in this guide: Who must pay, Who is eligible, How much is payable, A calculation example, When to pay, Records to keep, Common errors

Who must pay

Establishments with 20 or more employees. Many states extend it to smaller units. If your organisation crossed that headcount at any point in the year, check whether it applies to you.

Three managers reviewing compliance paperwork in an office
Statutory filings reward teams that review the paperwork before the deadline, not on it.

Who is eligible

  • ✓The employee earns up to ₹21,000 a month in basic plus dearness allowance.
  • ✓The employee has worked at least 30 days in the accounting year.
  • ✓The employee is not excluded under the law, for example through certain categories of misconduct.

How much is payable

The minimum is 8.33 percent of wages and the maximum is 20 percent, depending on the allocable surplus. The wage used in the calculation is capped at ₹7,000 a month or the applicable minimum wage, whichever is higher. Government notifications dated 25 August 2026 confirmed these two ceilings under the Code on Wages.

A worker sits in a dimly lit industrial workshop with sparks flying from machinery.
Statutory filings reward teams that review the paperwork before the deadline, not on it.

A calculation example

If the minimum wage is ₹10,000 a month and the employee worked all twelve months, the annual calculation wage is ₹1,20,000. At 8.33 percent, the bonus is ₹9,996. Employees who worked fewer months get a proportionate amount.

When to pay

Bonus is due within eight months of the end of the accounting year, unless a dispute is pending. Many employers pay it before a major festival.

Records to keep

  • ✓A register showing the bonus calculation for each employee
  • ✓The annual return in the required form
  • ✓Proof of payment through bank transfer

Common errors

  • ✓Using full salary instead of the capped wage
  • ✓Forgetting employees who left during the year, who are still entitled for the period worked
  • ✓Citing the old Act in letters and registers instead of the Code on Wages

Sources

Check the current notifications with your payroll advisor before you finalise bonus figures.

Nihit Dobariya

Written by

HR Manager, Airwix Technologies (Sleet)

Nihit Dobariya is the HR Manager at Airwix Technologies in Ahmedabad, where he runs HR and payroll for the team behind Sleet. He writes about payroll, PF and ESIC, professional tax, the labour codes and everyday HR practice for Indian employers, and checks each rule against the official notification before it is published.

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