How to use the Bonus Calculator
- Choose statutory or company bonus.
- Enter monthly salary (basic + DA), the bonus rate and months worked.
- For statutory bonus, add the applicable minimum wage if it's above ₹7,000.
Formula
Statutory bonus = min(Salary, max(₹7,000, Minimum wage)) × Rate × Months ÷ 100
How statutory bonus is calculated
- Check eligibility: salary (basic + DA) up to ₹21,000 a month and at least 30 working days in the year.
- Cap the salary at ₹7,000 or the applicable minimum wage, whichever is higher.
- Multiply by the bonus rate — at least 8.33%, at most 20% depending on allocable surplus — and by months worked.
Note
India's Labour Codes (the Code on Wages, 2019 and the Code on Social Security, 2020) replace older Acts including the Payment of Gratuity Act and the Payment of Bonus Act, and change some definitions such as “wages”. Check which rules apply to your employer.
Worked examples
Salary ₹18,000, 8.33%, full year, no minimum wage entered
- Salary capped at ₹7,000
- 7,000 × 8.33% × 12 = ₹6,997.20
Statutory bonus ₹6,997
Same, but minimum wage ₹12,000
- Salary capped at ₹12,000
- 12,000 × 8.33% × 12 = ₹11,995.20
Statutory bonus ₹11,995
Important notes
- Performance bonuses and festival bonuses paid by company policy are separate from statutory bonus.
Frequently asked questions
Is 8.33% bonus compulsory?
For establishments and employees covered by the law, the minimum bonus of 8.33% is payable even if the business made no profit, subject to the conditions in the law.
Can bonus be paid monthly?
Some employers pay it monthly as part of salary; statutory bonus is normally paid within eight months of the end of the accounting year. Check your employer's practice.
Sources and review
Last reviewed on by the BizToolsIndia editorial team. Official references:
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