Who gets statutory bonus
Statutory bonus now sits in the Code on Wages, 2019, which came into force on 21 November 2025. On 25 August 2026 the Ministry of Labour and Employment notified the two numbers that decide it: employees earning up to ₹21,000 a month are eligible, and bonus is calculated on wages of ₹7,000 a month or the applicable minimum wage, whichever is higher. The employee must also have worked at least 30 days in the accounting year.
The formula
Bonus = wages used for bonus × months worked × bonus rate, where the wages used are the lower of actual wages and the calculation ceiling, and the rate is at least 8.33% and at most 20%.
Example
| Input | Value |
|---|---|
| Basic + DA | ₹15,000 a month |
| Applicable minimum wage | ₹11,000 a month |
| Calculation ceiling | ₹11,000 (higher of ₹7,000 and minimum wage) |
| Months worked | 12 |
| Minimum bonus at 8.33% | ₹10,996 |
| Maximum bonus at 20% | ₹26,400 |
An employee earning ₹25,000 a month is outside statutory bonus. Anything paid to them at Diwali is ex-gratia and follows company policy.
Before you pay
Check which minimum wage applies to your state, industry and skill category, because it can raise the ceiling well above ₹7,000. The accounting year 2025-26 straddles the switch to the labour codes on 21 November 2025, so confirm with your payroll adviser how your organisation applies the transition. Read the full Diwali bonus calculation guide and estimate take-home pay with the salary calculator.
Frequently asked questions
Who is eligible for statutory bonus?
Employees whose wages are not more than ₹21,000 a month and who have worked at least 30 days in the accounting year, in establishments covered by the bonus provisions of the Code on Wages, 2019.
How is statutory bonus calculated?
Bonus is paid on wages capped at ₹7,000 a month or the applicable minimum wage, whichever is higher. The minimum is 8.33% of those wages for the year (or ₹100, if higher) and the maximum is 20%, depending on the allocable surplus.
When were the new bonus limits notified?
The Ministry of Labour and Employment notified the ₹21,000 eligibility limit and the ₹7,000 or minimum wage calculation ceiling on 25 August 2026, effective from 21 November 2025, when the labour codes came into force.
By when must bonus be paid?
Within eight months from the close of the accounting year. For an April to March year that means by 30 November, which is why most companies pay it around Diwali.
Is Diwali bonus taxable?
Yes. Statutory bonus and any ex-gratia Diwali bonus are part of salary and taxed at the employee's slab rate, with TDS deducted by the employer.
Can I pay bonus to employees earning more than ₹21,000?
Yes, as an ex-gratia or performance bonus under your own policy. The statutory minimum and maximum do not apply to it.
