Statutory Bonus Calculator
Annual bonus under the Payment of Bonus Act: the ₹21,000 eligibility line, the ₹7,000-or-minimum-wage calculation ceiling, and the 8.33% to 20% range.
finance
Adjust the inputs below
Ready when you are
Adjust the inputs on the left to see your bonus for the year.
The Diwali bonus many employees receive is not a gift. For anyone earning up to ₹21,000 a month in a covered establishment, an annual bonus of at least 8.33% of wages is a legal entitlement under the Payment of Bonus Act, 1965 — rules the Code on Wages, 2019 carries forward with the same thresholds.
Two ceilings, and people confuse them
Eligibility: ₹21,000. You are entitled to the bonus if your monthly basic + DA is ₹21,000 or less and you worked at least 30 days in the accounting year. Earn ₹21,001 and the Act does not cover you (your employer may still pay a bonus, but by contract, not by law).
Calculation: ₹7,000 or the minimum wage, whichever is higher. The bonus is not computed on your actual salary. It is computed on your salary capped at ₹7,000 a month — or at the minimum wage notified for your job, if that is higher. The 2015 amendment raised both figures, from ₹10,000 and ₹3,500.
So an employee on ₹15,000 with a ₹7,000 ceiling gets a bonus on ₹7,000, not ₹15,000:
| Monthly basic + DA | Minimum wage | Computed on | 8.33% for the year | 20% for the year |
|---|---|---|---|---|
| ₹6,000 | ₹7,000 | ₹6,000 | ₹5,998 | ₹14,400 |
| ₹15,000 | ₹7,000 | ₹7,000 | ₹6,997 | ₹16,800 |
| ₹18,000 | ₹10,000 | ₹10,000 | ₹9,996 | ₹24,000 |
| ₹21,000 | ₹12,000 | ₹12,000 | ₹11,995 | ₹28,800 |
| ₹25,000 | ₹7,000 | not eligible | — | — |
Where the state minimum wage for your scheduled employment is above ₹7,000, that wage becomes the ceiling — which is why the calculator asks for it. In most states and trades today it is, so the ₹7,000 figure is a floor more than a ceiling.
8.33% to 20%
The minimum bonus is 8.33% of the year's computed wages — one month's capped wage — and it is payable whether or not the employer made a profit. The maximum is 20%, and where the bonus lands between the two depends on the establishment's allocable surplus for the year, worked out under the Act's formula. Set-on and set-off rules carry surplus or shortfall across up to four years, so the rate can differ year to year at the same employer.
Who is covered
Every factory, and every other establishment with 20 or more employees (a state government may bring 10-plus establishments in). A new establishment is exempt for its first five accounting years except in any year it makes a profit. Employees dismissed for fraud, violent conduct or theft in the year lose the entitlement. Apprentices under the Apprentices Act are not employees for this purpose.
When and how it is paid
Within eight months of the close of the accounting year — for an April-to-March year, by the end of November, which is why it tends to arrive around Diwali. It is paid in cash or bank transfer, not in kind, and it is taxable as salary in the year you receive it, with TDS applied that month.
An employer that pays a puja bonus or customary bonus during the year may set it off against the statutory bonus due.
What this calculator assumes
Wages are basic + DA (allowances such as HRA and overtime are outside "salary or wage" for the Act). The months-worked input pro-rates for a partial year; the 30-working-day minimum is your responsibility to check. The declared rate slider lets you see the figure at any percentage between the statutory floor and cap.
Statutory Bonus — frequently asked questions
Who is eligible for statutory bonus in India?
Employees whose monthly basic + DA is ₹21,000 or less, who have worked at least 30 days in the accounting year, in a factory or in an establishment with 20 or more employees. Above ₹21,000 the Payment of Bonus Act does not apply, though an employer may still pay a bonus by contract.
How is the statutory bonus calculated?
On monthly basic + DA capped at ₹7,000 or the minimum wage for your job, whichever is higher — not on your full salary. Multiply the capped wage by the months worked and by the declared rate between 8.33% and 20%. On ₹15,000 with a ₹7,000 ceiling, the minimum bonus for a full year is 8.33% of ₹84,000 = ₹6,997.
What is the minimum and maximum bonus?
8.33% of the year’s computed wages is the minimum, payable even if the employer made no profit; 20% is the maximum. Where the rate lands between them depends on the allocable surplus, with set-on and set-off carried across up to four years. On a ₹7,000 ceiling the range is ₹6,997 to ₹16,800 a year.
Is the statutory bonus taxable?
Yes. It is salary income in the year it is received and taxed at your slab, with TDS deducted in the month it is paid. There is no separate exemption for it.
By when must the bonus be paid?
Within eight months of the close of the accounting year. For a financial year ending 31 March that means by 30 November, which is why it usually arrives around Diwali. It must be paid in money, not in kind.
Does a new company have to pay bonus?
A new establishment is exempt for its first five accounting years, except in any of those years in which it earns a profit — in a profitable year the bonus is payable. From the sixth year the normal rules, including the 8.33% minimum regardless of profit, apply.
Embed this calculator
Free to use on your own site — no signup, no key, no limits. Paste this where you want the calculator to appear. Please keep the attribution line; it is the only thing we ask in return.
Add ?theme=light to the embed URL for a light background. The frame reports its own height to the parent window as a asc-embed-height message if you would rather size it automatically than use the fixed 620px.
Related calculators
In-Hand Salary Calculator
Turn a CTC offer into the amount that actually reaches your bank account — PF, professional tax by state, and income tax under both regimes, for FY 2025-26 (AY 2026-27).
Gratuity Calculator
Work out your gratuity under the Payment of Gratuity Act — the 15/26 formula, the five-year rule, and how much of it is tax-free.
ESI Calculator
Employees’ State Insurance contribution on monthly wages — the 0.75% employee share, the 3.25% employer share and whether the ₹21,000 ceiling covers you at all.
EPF Calculator
Project your Employees’ Provident Fund balance at retirement — the 12% + 12% split, the EPS pension share, yearly interest credit and what a VPF top-up adds.
Results from this calculator are estimates for informational use only — not financial, medical, or professional advice. Read our full disclaimer before acting on any number you see here.