Statutory Bonus Calculator
Work out the annual statutory bonus payable to an employee — 8.33% to 20% on salary capped at ₹7,000 or the minimum wage, with an instant eligibility check.
How the bonus is worked out
Payment of Bonus Act 1965Get bonus, PF & payroll handled by experts
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Disclaimer: Indicative estimate under the Payment of Bonus Act 1965. Actual bonus depends on the employer's allocable surplus, set-on/set-off and applicable minimum wage notification.
Statutory bonus under the Payment of Bonus Act 1965
Every employee drawing a salary or wage up to ₹21,000 per month in an establishment of 20 or more workers is entitled to an annual bonus. The bonus is not calculated on the full salary — it is worked out on salary capped at ₹7,000 per month or the minimum wage for that scheduled employment, whichever is higher. The rate ranges from a statutory minimum of 8.33% to a maximum of 20%.
Worked examples
The salary used for the calculation is capped at ₹7,000 (or the minimum wage if higher), then multiplied by 12 months and the bonus percentage. Here is how the same ₹18,000/month employee is treated at different rates:
Key terms explained
Eligibility ceiling (₹21,000)
An employee must earn ₹21,000 or less per month to claim statutory bonus, and must have worked at least 30 days in the year. Anyone above the ceiling is outside the Act — bonus, if any, is contractual.
The ₹7,000 cap
Even if the actual salary is higher, bonus is computed on a salary capped at ₹7,000 per month or the notified minimum wage for that scheduled employment — whichever is higher.
8.33% vs 20%
The minimum bonus is 8.33% and is payable even in a loss year. The maximum is 20%, paid when the employer's allocable surplus allows it; the actual rate falls in between.
Allocable surplus
The share of the employer's gross profit (60% or 67%) available for bonus after prior charges. It determines whether the bonus rate rises above the 8.33% floor toward the 20% ceiling.
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Disclaimer: This tool gives indicative results for general guidance only and is not professional advice. Please verify with a qualified CA before acting on the numbers.