Minimum bonus
8.33%
of wages, or ₹100
Maximum bonus
20%
when profits allow
Eligible up to
₹21,000
wages a month
Pay by
30 Nov 2026
for April 2025 to March 2026
Code on Wages, 2019, sections 26 to 41, and the Ministry of Labour and Employment notifications of 25 August 2026. Bonus figures are PayMetric Labs' own calculations from those rules.
Statutory bonus calculator
Basic pay plus DA, not gross. Add any allowances above half your total pay.
At least 30 days of work are needed to qualify.
The minimum wage for your job and state, if it is above ₹7,000.
8.33% is the legal minimum; up to 20% when profits allow.
Your statutory bonus at 8.33%
₹7,000
Worked out on ₹7,000 a month, because wages above ₹7,000 are counted only up to that amount, for 12 months. At the 20% maximum it would be ₹16,800.
PayMetric Labs' own calculation from the Code on Wages, 2019 and the notifications of 25 August 2026: eligibility up to ₹21,000 a month of wages, bonus worked out on ₹7,000 or your minimum wage, whichever is higher, with a minimum of ₹100. Assumes the same wages every month and an establishment with 20 or more employees. Not legal advice.
What changed: the Payment of Bonus Act became the Code on Wages
The Payment of Bonus Act, 1965 was repealed on 21 November 2025, when the bonus chapter of the Code on Wages, 2019 came into force (Taxmann). The Code on Wages (Central) Rules followed in May 2026 (PRS). For most employees, the familiar numbers carried over: the 8.33% minimum, the 20% maximum and the 30-day rule.
The two money limits are no longer written into the law itself; the government now sets them by notification. On 25 August 2026 the Ministry of Labour and Employment notified them, backdated to 21 November 2025: ₹21,000 a month for eligibility, and bonus worked out on ₹7,000 or the minimum wage, whichever is higher (SCC Online). Because the Code lets the appropriate government set these figures, check whether your state has issued its own notification.
Two other changes matter. The Code applies to establishments with 20 or more employees; the old Act also covered every factory, whatever its size. And it uses a new definition of wages: basic pay, dearness allowance and retaining allowance, but if allowances such as HRA and conveyance make up more than half of your total pay, the excess counts as wages too (Taxmann). Eligibility is tested on that figure, so some people with gross pay above ₹21,000 can still qualify. Your employer's payroll team can confirm your wages figure.
How the 8.33% bonus is calculated, with examples
Twelve months worked, bonus calculated on the ₹7,000 floor (no higher minimum wage). PayMetric Labs' own calculation:
| Monthly wages | Calculated on | Minimum (8.33%) | Maximum (20%) |
|---|---|---|---|
| ₹6,000 | ₹6,000 | ₹6,000 | ₹14,400 |
| ₹7,000 | ₹7,000 | ₹7,000 | ₹16,800 |
| ₹12,000 | ₹7,000 | ₹7,000 | ₹16,800 |
| ₹18,000 | ₹7,000 | ₹7,000 | ₹16,800 |
| ₹21,000 | ₹7,000 | ₹7,000 | ₹16,800 |
| ₹25,000 | Not eligible | None | None |
Two things surprise people. First, everyone earning between ₹7,000 and ₹21,000 gets the same minimum bonus, because the calculation stops at the cap: at 8.33% for a full year it is exactly one month of the base. Second, cross ₹21,000 by a single rupee of wages and the statutory bonus falls to nothing, though most employers above that line pay a contractual or performance bonus instead.
The ₹7,000 figure is a floor, not a fixed number. If the minimum wage for your job is higher, the bonus is calculated on that, which raises it in step. Minimum wages vary by state, industry and skill level, so enter yours in the calculator above.
Do you qualify? Check five things
- Your wages (basic + DA, plus any allowances above half your pay) are ₹21,000 a month or less.
- You worked at least 30 days in the accounting year, counting paid leave and holidays.
- Your employer has 20 or more employees.
- You were not dismissed for fraud, violent behaviour, theft or sabotage, or convicted of sexual harassment.
- You are an employee, not an apprentice or trainee.
When the bonus must be paid
The Code gives employers eight months from the end of the accounting year, paid into your bank account. For the usual April to March year ending 31 March 2026, the deadline is 30 November 2026, so most employers time it for Diwali. If there is a dispute about the amount, the 8.33% minimum is still due on time. Where a contractor employs you and does not pay, the principal employer has to pay the minimum.
Getting a performance or Diwali bonus instead?
See what your salary and bonus leave after tax under both regimes.
How a bonus is taxed, and the ₹12 lakh trap
Every bonus, statutory or contractual, is salary taxed in the year you receive it, and your employer deducts TDS on it. Extra tax a bonus adds under the new regime for FY 2026-27, PayMetric Labs' own modeled estimate (standard deduction, no other income):
| Annual salary | Bonus | Extra tax | You keep |
|---|---|---|---|
| ₹10,00,000 | ₹1,00,000 | ₹0 | ₹1,00,000 |
| ₹12,00,000 | ₹1,00,000 | ₹26,000 | ₹74,000 |
| ₹12,75,000 | ₹50,000 | ₹52,000 | -₹2,000 |
| ₹18,00,000 | ₹1,50,000 | ₹31,200 | ₹1,18,800 |
| ₹30,00,000 | ₹3,00,000 | ₹93,600 | ₹2,06,400 |
The odd rows are just above the rebate limit. Up to ₹12 lakh of taxable income there is no tax under the new regime; just above it, marginal relief caps the tax at the amount by which you cross ₹12 lakh, and the 4% cess is added on top. So between about ₹12 lakh and ₹12.7 lakh of taxable income, a bonus is almost entirely taxed away: on ₹12,75,000 of salary, a ₹50,000 bonus costs ₹52,000 in tax. If you are close to that line, ask whether part of a bonus can go into tax-free benefits instead. Our 87A rebate guide explains the mechanism.
Statutory bonus 2026: questions
Who is eligible for statutory bonus in 2026?
Employees whose wages are up to ₹21,000 a month and who worked at least 30 days in the accounting year, in an establishment with 20 or more employees. "Wages" here means basic pay plus dearness allowance as the Code on Wages defines them, not your gross or CTC. Trainees and apprentices are generally outside it.
How is the 8.33% bonus calculated?
Take your monthly wages, but no more than ₹7,000 or the minimum wage for your job, whichever is higher. Multiply by the months you worked and by 8.33% (one twelfth). On the ₹7,000 base for a full year, that is ₹7,000, exactly one month of the base. The employer can pay up to 20% when profits allow: ₹16,800 on the same base.
Why is my bonus only ₹7,000 when I earn ₹18,000 a month?
Because the law calculates bonus on a capped amount, not your full pay. If your wages are above ₹7,000, the bonus is worked out as if you earned ₹7,000, or your minimum wage if that is higher. On ₹7,000, 8.33% for 12 months is ₹7,000. If the minimum wage for your job is higher, ask your employer to use it.
What is the last date to pay statutory bonus in 2026?
Within eight months of the end of the accounting year. For a year that ended on 31 March 2026, that is 30 November 2026. Most employers pay before Diwali. The minimum 8.33% is due by the deadline even if the amount above it is disputed.
Do I get bonus if the company made a loss?
Yes, the minimum 8.33% is payable whether or not there is a profit. The exception is a new establishment in its first five accounting years, which pays only in a year it makes a profit.
I joined mid-year. Do I get a bonus?
Yes, if you worked at least 30 days in the year. It is proportionate to the wages you earned: five months at ₹18,000 a month, calculated on the ₹7,000 base, gives a minimum of ₹2,917.
Is statutory bonus taxable?
Yes. Any bonus is salary income, taxed in the year you receive it, and your employer deducts TDS on it. If your total income stays within the rebate limit (₹12 lakh of taxable income under the new regime), there is no tax to pay.
What if my employer does not pay the bonus?
Raise it with your employer first, in writing. If it is still unpaid after the deadline, you can complain to the labour authority (the inspector-cum-facilitator under the Code). Where a contractor employs you and fails to pay, the principal employer must pay the minimum bonus.
Methodology and limits
Bonus rules come from the Code on Wages, 2019 (sections 26 to 41) as summarised by Taxmann and PRS Legislative Research, and the wage limits from the Ministry of Labour and Employment notifications of 25 August 2026 as reported by SCC Online. Checked 15 October 2026. State notifications may differ for establishments where the state is the appropriate government.
The calculator assumes the same wages every month and does not model the allocable surplus that decides any bonus above 8.33%, or set-on and set-off. Tax figures use PayMetric Labs' FY 2026-27 income tax engine, new regime, for a resident under 60 with the standard deduction only. This is general information, not legal or tax advice.