At a glance
| Item | Position |
|---|---|
| Law | Code on Wages, 2019 (Chapter IV); replaced the Payment of Bonus Act, 1965 |
| Establishments | 20 or more persons employed on any day in the accounting year |
| Eligible employees | Wages up to ₹21,000 a month, and at least 30 working days in the year |
| Calculation ceiling | For wages above ₹7,000: bonus is worked out on ₹7,000 or the minimum wage fixed by the Central Government, whichever is higher |
| Minimum | 8.33% of wages, or ₹100, whichever is higher — payable even without profit |
| Maximum | 20% of wages, from the allocable surplus |
| Pay by | Within 8 months of the close of the accounting year |
The eligibility and calculation ceilings were notified on 25 August 2026 (S.O. 4710(E) and a companion notification) with effect from 21 November 2025, when the Code came into force. Bonus for the year that includes that date follows them.
Working it out
Take the calculation wage — actual wages, or ₹7,000 / the Central minimum wage if the employee earns more than ₹7,000 — for each month worked, and apply the bonus rate declared for the year, between 8.33% and 20%.
The rate above 8.33% depends on the allocable surplus (a share of the year’s available surplus, worked out from the accounts). A surplus above the 20% maximum is carried forward (set on) for up to four years; a shortfall is set off against later years.
| Employee | Monthly wage | Calculation wage | Bonus at 8.33% for 12 months |
|---|---|---|---|
| A | ₹6,500 | ₹6,500 | ₹6,497 |
| B | ₹18,000 | The higher of ₹7,000 and the Central minimum wage for the employment | 8.33% × that wage × 12 |
| C | ₹24,000 | Not eligible (above ₹21,000) | — |
What HR does
- At year end, list employees who earned up to ₹21,000 and worked 30 days or more.
- With finance, work out the allocable surplus and declare the rate.
- Pay within eight months of the year end, and keep the bonus register.
- Employees dismissed for fraud, violence or theft of the employer’s property can be disqualified.
WebHR works out statutory bonus for the year from each month’s wages: eligibility at ₹21,000 and 30 working days, the ₹7,000-or-minimum-wage calculation ceiling, and the rate you declare between 8.33% and 20%. It exports the bonus register in the Form C layout the Payment of Bonus rules used, and the compliance calendar adds the payment date.
Due dates
| What | When | How often |
|---|---|---|
| Statutory bonus | Within 8 months of the close of the accounting year (30 November for an April–March year) | Annual |
If a due date falls on a holiday, the authority’s own rule for the next working day applies. Full compliance calendar
References
Related
Plain-language guidance for HR teams, not legal advice. Checked against the sources above on 29 September 2026; the notification or your authority’s portal is final. Spotted something out of date? Tell us.