Diwali Bonus Calculator
Updated September 2026 · Free · No sign-up
Calculate your Diwali bonus — the statutory 8.33-20% bonus most Indian employers pay at Diwali, the ₹7,000/minimum-wage calculation base, ex-gratia for higher earners, and what lands in your account after TDS.
Quick answer: Most Diwali bonuses ARE the statutory annual bonus paid at festival time: 8.33% to 20% of basic+DA, computed on min(basic, ₹7,000 or the scheduled minimum wage). Eligible (basic ≤ ₹21,000): typically ₹7,000-16,800. Above ₹21,000: any Diwali payment is ex-gratia — company's choice, fully taxable.
Diwali Bonus = Statutory Bonus, Timed for the Festival
India's Payment of Bonus Act requires an annual bonus of 8.33-20% of basic+DA for employees earning basic ≤ ₹21,000/month — payable within 8 months of the accounting year (ending March 31), which is why October-November is the traditional payment window. The "Diwali bonus" on your slip is usually exactly this. Full Act mechanics: statutory bonus calculator.
Worked Examples
Example 1 — eligible worker. Basic ₹15,000, full year, 8.33%: base caps at ₹7,000 → 7,000 × 12 × 8.33% = ₹6,997 — the classic "one month of seven thousand" Diwali credit.
Example 2 — 20% declaration. Profitable year, employer declares the maximum: 7,000 × 12 × 20% = ₹16,800. PSUs and unionized factories commonly land here.
Example 3 — the ₹40,000-basic IT employee. Above the ₹21,000 ceiling: no statutory entitlement. A ₹10,000 Diwali credit is ex-gratia/company policy — welcome, taxable, and not enforceable next year.
Example 4 — joined in June. 10 months worked: 7,000 × 10 × 8.33% = ₹5,831 — proration by months with at least 30 working days.
Tax on the Diwali Bonus
| Payment | Tax treatment |
|---|---|
| Statutory bonus | Fully taxable salary — TDS adjusts in that month's payroll |
| Ex-gratia / performance payout | Fully taxable salary |
| Diwali gift in kind (hamper, voucher) | Tax-free up to ₹5,000/year of aggregate gift value; above that, fully taxable as perquisite |
| Gold coins / high-value gifts | Perquisite at full value once past the ₹5,000 aggregate |
The month's TDS often jumps because payroll annualizes — the same withholding illusion covered in the bonus tax calculator, resolved at return filing.
Know Your Rights (Eligible Employees)
- 8.33% is a floor, not a favor — payable even in loss years (new establishments get a 5-year profit-linked window).
- Resigned mid-year? Prorated bonus is still owed with ≥30 working days of service — it belongs in your FnF settlement or within 8 months of year close.
- Deadline: for FY 2025-26, payment is due by end-November 2026 — a "we'll see next year" on statutory bonus is a labour-office complaint waiting.
- Base check: states notify minimum wages above ₹7,000 for many scheduled employments — your calculation base may legally be higher than ₹7,000.
For Employers: The Diwali Payout Checklist
- Declare the rate from allocable surplus (8.33% floor, 20% cap, set-on/set-off applied).
- Pay eligible employees (basic ≤ ₹21,000) per the Act; decide ex-gratia separately for the rest — and label the two lines distinctly on payslips to avoid precedent claims.
- Prorate joiners/leavers; include eligible contract workers where you are the principal employer per applicable rulings.
- Gifts: keep the in-kind aggregate under ₹5,000/head for the perquisite exemption; cash is always taxable.
- Update registers (Forms A-D) — Diwali-time payment satisfies the 8-month statutory deadline neatly.
Frequently Asked Questions
How is Diwali bonus calculated?
Usually as the statutory bonus: 8.33-20% × min(basic+DA, ₹7,000 or the scheduled minimum wage) × months worked. Full-year at the minimum rate ≈ ₹7,000.
Who is entitled to a Diwali bonus?
Employees with basic+DA up to ₹21,000/month and 30+ working days in the year, at covered establishments (20+ employees). Higher earners receive ex-gratia at company discretion.
Is Diwali bonus taxable?
Yes — statutory bonus and ex-gratia are fully taxable salary. Only in-kind gifts (hampers, vouchers) up to ₹5,000/year aggregate are tax-free.
When must the Diwali/statutory bonus be paid?
Within 8 months of the accounting year end — for FY 2025-26, by end-November 2026, which is why Diwali season is the traditional window.
Do I get the bonus if I resigned before Diwali?
Yes — prorated for months worked (30+ days), payable in your final settlement. Resignation does not forfeit statutory bonus.
Why is my bonus only ₹7,000 on a ₹15,000 basic?
The Act caps the calculation base at ₹7,000 (or the applicable minimum wage) even for those under the ₹21,000 eligibility ceiling.
✓ Formula verified • Last updated: September 27, 2026