Statutory Bonus Calculator
Work out statutory bonus under the Code on Wages — between 8.33% and 20% of wages, for employees under the eligibility threshold, calculated on the lower of actual wages and the calculation ceiling.
Free · No sign-up · Nothing leaves your browser · Figures reviewed 22 September 2026
Your details
Minimum 8.33%, maximum 20%. Anything above 20% is contractual, not statutory.
Employees earning above this are outside the statutory scheme. Verify against the current notification.
Bonus is computed on the lower of actual wages and this figure.
The calculation ceiling is the higher of the notified ceiling and the minimum wage for the scheduled employment. Leave at 0 if it is lower.
Statutory bonus for the year
₹6,997
8.3% of ₹7,000 a month, over 12 months.
How it is worked out
- Monthly wages
- ₹18,000
- Calculation baseCapped at ₹7,000 — the higher of the ceiling and the minimum wage
- ₹7,000
- Bonus rate
- 8.3%
- Months worked
- 12 months
- Bonus payable
- ₹6,997
The statutory range
- Minimum (8.3%)
- ₹6,997
- Maximum (20%)
- ₹16,800
Anything above the maximum is a contractual bonus, not a statutory one, and is treated differently on the books.
Statutory bonus now sits under the Code on Wages; the Payment of Bonus Act 1965 is repealed.
The eligibility threshold and the calculation ceiling were freshly notified in August 2026. Both are editable above precisely because they move — verify the current figures against the notification before a live run.
The computation base changed with the wage definition on 21 November 2025, in the same way gratuity's did.
This is an estimate for planning, not tax or legal advice. Statutory rates and thresholds are date-effective and change by notification — confirm against the current one before you run payroll or file.
Statutory bonus is a minimum annual payment to employees earning below a notified wage threshold. The rate is between 8.33% and 20%, and it is calculated not on actual wages but on the lower of actual wages and a separate calculation ceiling — which is itself the higher of the notified figure and the applicable minimum wage.
Both thresholds were freshly notified in August 2026, so both are editable here rather than baked in. Check them against the current notification before you run a bonus cycle.
Two thresholds that do different jobs
The eligibility threshold decides who is in the scheme. Earn above it and any bonus you receive is contractual, governed by your contract rather than by the Code.
The calculation ceiling decides what the percentage is applied to. Someone earning ₹18,000 a month who is eligible does not get 8.33% of ₹18,000; they get 8.33% of the ceiling. Conflating the two overstates the liability by a wide margin.
Rate, and what sits above it
8.33% is the statutory minimum and is payable regardless of whether the business made an allocable surplus. 20% is the statutory maximum. Between the two, the rate follows the surplus calculation under the Code.
Paying above 20% is entirely legal, but the excess is a contractual bonus and is accounted for and disclosed differently. It also does not reduce the statutory obligation in a later year.
Frequently asked questions
- What is the minimum statutory bonus?
- 8.33% of wages, payable to eligible employees whether or not the business has an allocable surplus. The maximum is 20%.
- Who is eligible for statutory bonus?
- Employees earning wages at or below the notified eligibility threshold, who have worked at least 30 days in the accounting year. The threshold was revised by notification in August 2026, so confirm the current figure.
- Is bonus calculated on actual salary?
- No, on the lower of actual wages and the calculation ceiling — where the ceiling is the higher of the notified figure and the minimum wage for that scheduled employment. That is why the payout is far smaller than the percentage of full salary.
- Is statutory bonus the same as a performance bonus?
- No. Statutory bonus is a legal entitlement under the Code on Wages. A performance bonus is contractual. Paying one does not discharge the other where the employee is within the statutory threshold.
About this tool
Built by the ViniOffice team. Figures and rules last reviewed 22 September 2026 against the statutory reference this team maintains. Indian statutory rates are date-effective and change by notification — confirm against the current one before running payroll or filing. This is an estimate for planning, not tax or legal advice. Statutory rates and thresholds are date-effective and change by notification — confirm against the current one before you run payroll or file.
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