How Statutory Bonus works
The bonus is between 8.33% and 20% of the bonus-basis wage, calculated on the actual wage or ₹7,000 (or the minimum wage, whichever is higher), whichever is lower. The exact percentage depends on the employer's allocable surplus for the year, subject to the minimum of 8.33%.
Why Statutory Bonus matters
Statutory bonus is a legal right for eligible workers, typically paid before a festival, and non-payment is an offence, so employers must budget for it.
Allocable surplus and the 8.33 to 20 percent range
The exact bonus percentage between the 8.33% floor and the 20% ceiling depends on the employer's allocable surplus, a share of profit computed under the Act, with set-on and set-off rules that carry surplus across years. In practice many employers simply pay the 8.33% minimum, while profitable ones pay more up to the cap. The wage used for the calculation is capped at ₹7,000 or the applicable minimum wage, whichever is higher, so a higher salary does not increase the bonus once you cross that basis. Bonus is normally paid within eight months of the close of the financial year, often timed to a festival.
Frequently asked questions
Who is eligible for statutory bonus?
Employees earning up to ₹21,000 a month who have worked at least 30 days in the year, in an establishment covered by the Payment of Bonus Act.
What is the minimum and maximum bonus?
The minimum is 8.33% and the maximum 20% of the bonus-basis wage, which is capped at ₹7,000 or the minimum wage, whichever is higher.