Payment of Bonus Act to Code on Wages, 2019: section map
This maps each subject of the repealed Payment of Bonus Act, 1965 to where it now sits in the Code on Wages, 2019, with a Changed, Unchanged or Dropped verdict on each row. New-code cells that cite [COW Section 26] are grounded in the supplied statutory text. Rows marked as outside the supplied extract are indicative and must be checked against the full Code.
| Payment of Bonus Act, 1965 (subject) | Now in Code on Wages, 2019 | Verdict |
|---|---|---|
| Eligibility: an employee who has worked at least 30 days in the accounting year is entitled to bonus | Same eligibility, worded the same way [COW Section 26] | Unchanged |
| Minimum bonus of 8.33 percent of wages or 100 rupees, whichever is higher, payable even when the employer has no allocable surplus | Same minimum bonus and the same rule that it is due whether or not there is an allocable surplus [COW Section 26] | Unchanged |
| Maximum bonus capped at 20 percent of wages where the allocable surplus is higher than the minimum | Same 20 percent cap tied to the allocable surplus [COW Section 26] | Unchanged |
| Wage ceiling that decides who counts as an eligible employee for bonus | Now an amount fixed by government notification instead of a figure written into the statute [COW Section 26] | Changed |
| Calculation ceiling: for higher-paid employees the bonus is worked out on a capped wage, not the full wage | Bonus computed as if the wage were the government-notified amount or the minimum wage, whichever is higher [COW Section 26] | Changed |
| Higher bonus based on production or productivity, agreed between employer and employees | Retained: a production or productivity bonus is set by agreement or settlement, within the same floor and cap [COW Section 26] | Unchanged |
| Set-on and set-off of allocable surplus carried across accounting years | Retained: Section 26 directs that set-on and set-off be taken into account under the Code's own set-on/set-off provision (named as section 36 in the extract) [COW Section 26] | Unchanged |
| Disqualification from bonus for fraud, theft or violent misconduct at work | Carried into the Code on Wages bonus provisions; the exact section is outside the supplied extract | Unchanged |
| Time limit for paying bonus after the accounting year closes | Provided for in the Code's bonus provisions; the exact section is outside the supplied extract | Unchanged |
| Adjustment of interim or customary bonus already paid against the amount due | Provided for in the Code's bonus provisions; the exact section is outside the supplied extract | Unchanged |
| Detailed schedules and definitions for computing gross profits and allocable surplus | Computation now sits inside the Code's own provisions; the detailed method is outside the supplied extract | Changed |
New-code sections are grounded in the supplied Code on Wages, 2019 text; the only bracketed section supplied is [COW Section 26]. Old-Act entries are described by subject from the repealed Act, without section numbers, because the exact old section numbers were not verified. Rows marked as outside the supplied extract are not grounded and must be confirmed against the full Code.
What changed
The Payment of Bonus Act, 1965 no longer exists as its own statute. From 21 November 2025 the subject sits inside the Code on Wages, 2019, one of the four labour codes, alongside minimum wages, payment of wages and equal remuneration. The Central Rules under the Code were notified on 8 May 2026. So the first change is structural: bonus is now one chapter of a combined wage law, not a stand-alone Act.
The substantive change visible in the supplied text is about the two wage ceilings. Under Section 26, the ceiling that decides who is an eligible employee is an amount per month determined by notification by the appropriate Government. The old Act carried a fixed rupee figure inside the statute itself; the Code hands that lever to a government notification, which can be revised without amending the law.
The calculation ceiling changed the same way. For an employee who earns above the notified amount, Section 26 says the bonus is worked out as if the wage were the government-notified amount or the minimum wage fixed by the appropriate Government, whichever is higher. Because minimum wages and bonus now live in the same Code, the bonus calculation base is tied directly to the minimum-wage machinery, and payroll must use whichever of the two is higher.
What stayed the same
The core bonus arithmetic is carried over almost word for word in Section 26, so most employers will not see their headline liability change.
- Eligibility still turns on having worked at least 30 days in the accounting year.
- The minimum bonus is still 8.33 percent of wages earned, or 100 rupees, whichever is higher.
- That minimum is still payable whether or not the employer has any allocable surplus, so a loss year does not remove it.
- The maximum bonus is still capped at 20 percent of wages where the allocable surplus is higher than the minimum.
- A higher, production-linked or productivity-linked bonus can still be fixed by agreement or settlement between employer and employees, within the same floor and cap.
- Set-on and set-off of allocable surplus across accounting years is retained; Section 26 directs that they be taken into account under the Code's set-on/set-off provision.
What was dropped or newly added
Nothing in the supplied Section 26 text removes a bonus entitlement. On the evidence of the extract, no employee right to bonus has been dropped; the visible changes are structural and mechanism-level rather than a cut to what workers receive.
What is effectively new, or newly explicit, is the link between the bonus calculation cap and the minimum wage. Section 26 names the minimum wage fixed by the appropriate Government as an alternative to the notified amount, using whichever is higher. Putting bonus and minimum wages in one Code makes that cross-reference direct rather than a separate exercise. The other addition is flexibility: both ceilings are now set by notification, so the government can move them without a fresh amendment.
A complete dropped-versus-added comparison needs the full Code text and its repeal-and-savings schedule, because the extract here covers eligibility and the bonus formula, not the computation schedules, disqualification, or timing rules.
Transition traps for employers
The risk in this transition is not the headline percentages, which are unchanged, but the inputs feeding them.
- Use the current notified ceilings, not the old fixed figures. The eligibility and calculation ceilings are now whatever the government notifies; do not hard-code the numbers from the repealed Act into payroll.
- Apply the whichever-is-higher test on the calculation cap. For higher-paid staff, compare the notified amount against the applicable minimum wage and compute bonus on the higher of the two.
- Re-check your wages base. The Code uses a single uniform definition of wages across all four codes, which can change the amount on which bonus is calculated; confirm payroll uses the Code definition, not the old one.
- Keep paying the minimum bonus in loss years. The 8.33 percent or 100 rupees floor is due even with no allocable surplus.
- Carry your set-on and set-off records forward. The allocable-surplus balance still moves between years, so the register must survive the switch to the Code.
- Align dates and state rules. The Code has applied since 21 November 2025 and the Central Rules were notified on 8 May 2026; check state rules and notified amounts for each state where you operate.
How to confirm
Treat this page as a map, not the statute. Confirm every figure and placement against the Code on Wages, 2019 bonus chapter text and the repeal-and-savings schedule on indiacode.nic.in, and read the Central Rules notified on 8 May 2026 for the current notified ceilings. Where a row above is marked as outside the supplied extract, verify it in the full Code before you rely on it.
Frequently asked questions
Is the Payment of Bonus Act, 1965 still in force?
No. It is repealed, and bonus is now governed by the Code on Wages, 2019, which came into force on 21 November 2025.
Did the minimum and maximum bonus percentages change?
No. Section 26 of the Code keeps the same minimum bonus of 8.33 percent of wages or 100 rupees, whichever is higher, and the same 20 percent maximum.
So what actually changed?
The wage ceilings that decide eligibility and the calculation base are now fixed by government notification instead of by figures written into the Act, and for higher earners the cap is the notified amount or the minimum wage, whichever is higher. Bonus also now sits inside a unified Code.
Do we still pay bonus in a loss-making year?
Yes. The minimum bonus is due whether or not the employer has any allocable surplus, exactly as under the old Act.
Move off the repealed acts cleanly
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