Statutory Bonus Calculator
Updated August 2026 · Free · No sign-up
Calculate statutory bonus under India's Payment of Bonus Act — the 8.33% minimum, 20% maximum, the ₹21,000 eligibility ceiling, and the ₹7,000 calculation floor that confuses everyone.
Quick answer: Statutory bonus = 8.33% to 20% of basic+DA, computed on min(actual basic+DA, ₹7,000 or the scheduled minimum wage, whichever is higher). Eligibility: basic+DA ≤ ₹21,000/month and 30+ working days in the year. Minimum bonus ≈ ₹7,000/year for most eligible employees.
The Two Ceilings (Where Everyone Gets Confused)
- Eligibility ceiling — ₹21,000: employees with basic+DA above ₹21,000/month are outside the Act entirely (they may still get contractual bonus, but nothing is owed statutorily).
- Calculation ceiling — ₹7,000: for eligible employees, the bonus computes on min(actual basic+DA, ₹7,000 — or the scheduled-employment minimum wage if that's higher). Earning ₹15,000 doesn't mean bonus on ₹15,000.
Worked Examples
Example 1 — standard case. Basic+DA ₹15,000, full year, 8.33%: calculation base = ₹7,000 → bonus = 7,000 × 12 × 8.33% = ₹6,997/year (the famous "one month of ₹7,000").
Example 2 — maximum declared. Same employee, employer declares 20% (good profits): 7,000 × 12 × 20% = ₹16,800.
Example 3 — low earner below the floor. Basic+DA ₹6,000: base = actual ₹6,000 → minimum bonus = 6,000 × 12 × 8.33% = ₹5,998.
Example 4 — partial year. Joined in October (6 months): proration applies — 7,000 × 6 × 8.33% = ₹3,499, payable even after leaving (statutory bonus survives resignation; it lands in the FnF settlement or within 8 months of year-end).
Who Is Covered
| Test | Rule |
|---|---|
| Establishment | Factories and establishments with 20+ employees (Act applies permanently once triggered) |
| Employee salary | Basic+DA ≤ ₹21,000/month |
| Service | 30+ working days in the accounting year |
| New establishments | First 5 years: bonus payable only in profit years |
| Disqualification | Dismissal for fraud, violent misconduct, or theft can forfeit bonus |
8.33% vs 20%: How the Percentage Gets Set
The Act ties the rate to allocable surplus (a defined slice of gross profits): minimum 8.33% regardless of profit, up to 20% when surplus allows, with set-on/set-off provisions smoothing good and bad years. In practice most private employers pay 8.33% as a December/Diwali line item; PSUs and unionized plants negotiate toward 20%. The bonus is fully taxable salary income in the year received.
Statutory Bonus vs Everything Else Called "Bonus"
- Performance bonus/variable pay: contractual, unlimited, unrelated to the Act — the CTC line most IT employees know.
- 13th month / festival bonus: customary or contractual (see the 13th month calculator for the Philippine statutory cousin).
- Attendance/retention bonuses: policy instruments, not statutory.
- Only the Payment of Bonus Act amount is legally enforceable at 8.33-20% — a labour-office complaint recovers it if unpaid.
For Employers: Compliance Notes
Registers (Form A-D), payment within 8 months of accounting year close, proration for joiners/leavers with 30+ days, and the interplay with minimum-wage schedules (states notifying minimum wages above ₹7,000 raise your calculation base). Exclusions from basic+DA for this Act: HRA, overtime, commissions — the base is narrower than gross, mirroring the component logic in the basic salary calculator.
Frequently Asked Questions
How is statutory bonus calculated?
Bonus % (8.33-20%) × min(basic+DA, ₹7,000 or the scheduled minimum wage if higher) × months worked. Most eligible employees get ~₹7,000/year at the minimum rate.
Who is eligible for statutory bonus?
Employees with basic+DA up to ₹21,000/month and 30+ working days in the year, at establishments with 20+ employees.
Why is my bonus calculated on ₹7,000 when I earn ₹15,000?
The Act caps the calculation base at ₹7,000 (or the applicable minimum wage) even for those earning up to the ₹21,000 eligibility ceiling.
Do I get statutory bonus if I resign?
Yes — prorated for months worked (30+ days minimum), payable in your final settlement or within 8 months of the accounting year end.
Is statutory bonus taxable?
Yes — fully taxable as salary income in the year received.
Can an employer pay less than 8.33%?
No — 8.33% is the legal minimum regardless of profits (except new establishments in their first 5 years, which pay only in profit years).
✓ Formula verified • Last updated: August 20, 2026