Bonus Calculator India 2026: Statutory Bonus Under the Code on Wages

It checks the ₹21,000 eligibility limit and the 30-day rule, applies the ₹7,000 or minimum-wage calculation base, and pro-rates for the months you worked. Use it to check your Diwali bonus before it is paid.

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How to Calculate Bonus on Salary: The Formula

The calculation base is your actual monthly wages, but if your wages are above ₹7,000, it's ₹7,000 or the applicable minimum wage, whichever is higher. The bonus % is at least 8⅓% (often written 8.33%) and at most 20%. Example: wages ₹18,000, minimum wage ₹10,000, 12 months at 8⅓% → ₹10,000 × 12 × 8⅓% = ₹10,000.

Bonus Examples by Salary

For a full year (12 months), assuming an applicable minimum wage of ₹10,000 a month. The salary figures are monthly wages as defined in the Code on Wages, not gross salary or CTC.

Wages above ₹21,000 a month are not eligible for statutory bonus. If your applicable minimum wage is ₹7,000 or less, the base is ₹7,000 and the full-year bonus at 8⅓% is ₹7,000. Use the bonus calculator above with your own minimum wage for an exact figure.

How to Use This Online Bonus Calculator

1. Enter your salary in any one way. If you know your monthly wages, enter them. Otherwise enter your CTC (tap AN/MO to switch between annual and monthly). Otherwise enter your gross salary and Basic + DA from your payslip. If you fill more than one, wages take priority, then CTC.
2. Enter the months you worked in the accounting year, from 1 to 12.
3. Enter the bonus %. 8⅓% is the legal minimum (enter 8.33 and the calculator uses exactly 8⅓%); your employer may pay up to 20%.
4. Enter the applicable minimum wage for your job. It sets the calculation base when your wages are above ₹7,000.
5. Read your result. It updates as you type and shows your wages, eligibility, calculation base and bonus, with the formula. Use Copy to save it.

Bonus Under the Code on Wages from 2026: What Changed

The Payment of Bonus Act, 1965 has been repealed. Statutory bonus is now governed by Section 26 of the Code on Wages, 2019, in force since 21 November 2025. On 25 August 2026 the Ministry of Labour and Employment notified the two limits that decide your bonus, both applying retrospectively from 21 November 2025:

• Eligibility (S.O. 4711(E)): employees whose wages are up to ₹21,000 a month are entitled to statutory bonus.
• Calculation (S.O. 4710(E)): for wages above ₹7,000 a month, bonus is calculated as if wages were ₹7,000 or the minimum wage, whichever is higher.

Both notifications are published in the Gazette of India.

Bonus is now calculated on "wages" as defined in the Code: Basic + DA + retaining allowance, plus any allowances above 50% of your pay. That's why this calculator asks for gross salary along with Basic + DA, or your CTC. The notification refers to the minimum wage fixed by the Central Government, and how state-sphere employers apply it is still debated, so confirm the figure your employer uses.

For the employer side (allocable surplus, set-on and set-off, new establishments and deductions), read our yearly bonus calculation formula guide.

Who Is Eligible for Statutory Bonus?

• Your wages are ₹21,000 a month or less.
• You worked at least 30 days in the accounting year.
• Your employer is covered: generally establishments employing 20 or more people.

You lose statutory bonus if you're dismissed for fraud, riotous or violent behaviour at work, theft, misappropriation or sabotage of the employer's property, or sexual harassment.

Salary above ₹21,000? You aren't entitled to statutory bonus. Many employers still pay an ex-gratia, festival or performance bonus, which follows company policy rather than the law. The calculator shows what that would be at your chosen percentage of wages.

Calculation Base: ₹7,000 or Minimum Wage

Bonus isn't calculated on your full wages. The law caps the base:

So two employees earning ₹15,000 and ₹20,000 get the same statutory bonus if their minimum wage is the same.

Minimum and Maximum Bonus, and Part-Year Bonus

• Minimum bonus: 8⅓% of the calculation base, or ₹100, whichever is higher. It's payable even if the company makes no profit.
• Maximum bonus: 20%. Where your employer lands between 8⅓% and 20% depends on its allocable surplus, which is 67% of available surplus (60% for banking companies).
• Part-year bonus: if you worked only part of the year, bonus is pro-rata. That's why the calculator multiplies by months worked.

When Is Bonus Paid? Tax and CTC

Statutory bonus must be paid within 8 months of the end of the accounting year. For an April–March year that's 30 November, so bonus for FY 2025-26 is due by 30 November 2026. That is why most employers pay it as a Diwali bonus.

Bonus is fully taxable as salary income, and your employer deducts TDS when paying it. Check the effect with our income tax calculator (see the Income Tax Department for salary tax rules). Many employers show statutory bonus inside CTC as an annual or monthly component; either way, it's a legal entitlement once you're eligible. If you resign, your pro-rata bonus is part of your full and final settlement; add it up with the full and final settlement calculator.

Who Should Use This Calculator, and Its Assumptions

Who it's for: private employees checking their Diwali or annual bonus, HR and payroll teams validating bonus under the new wage code, and employers budgeting bonus liability. It works as a bonus calculator for private employees in any establishment covered by the Code on Wages.

Assumptions:

• Salary priority: wages as entered, else wages derived from CTC (50% of total remuneration after employer gratuity, and ESI and statutory bonus where wages are ₹21,000 or less), else Basic + DA plus allowances above 50% of gross salary.
• The calculation base uses the minimum wage you enter. Check the applicable minimum wage with your employer.
• Bonus above 8⅓% depends on your employer's allocable surplus; the calculator uses the percentage you enter.
• Results are estimates for planning. Confirm your final payout with your payroll team.