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    Home › Free tools › Statutory Bonus
    Free tool

    Statutory Bonus Calculator

    Estimate your bonus — under the Payment of Bonus Act, 1965.

    Your details

    Eligibility and calculation both use Basic + DA, not gross salary.

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    Your estimate

    Estimated annual bonus—
    • Eligibility —
    • Wage base used —
    • Statutory minimum (8.33%) —
    • Statutory maximum (20%) —
    • Bonus at your rate —
    • Monthly provision —

    Estimate only. Under the Payment of Bonus Act, 1965, employees earning Basic+DA up to ₹21,000/month are eligible (in establishments with 20+ employees, after working at least 30 days in the year). Bonus is calculated on the lower of actual Basic+DA or the calculation ceiling — ₹7,000/month or the state-notified minimum wage for the role, whichever is higher — at 8.33% to 20% depending on allocable surplus, for the months actually worked.

    How it works

    How statutory bonus is calculated in India

    The Payment of Bonus Act, 1965 requires eligible establishments to pay an annual bonus to employees whose Basic + Dearness Allowance is ₹21,000 or less per month. This eligibility ceiling is separate from the calculation ceiling: even if your actual Basic+DA is, say, ₹15,000, the bonus itself is computed only on ₹7,000 (or the state-notified minimum wage for your scheduled employment, if that is higher) — whichever of the two is greater is used as the wage base. The annual bonus then equals that wage base × 12 (or the number of months actually worked) × a bonus percentage, which must be at least 8.33% and can go up to 20%, depending on the employer’s allocable surplus for the year.

    Eligibility conditions

    To be eligible, an employee must have worked at least 30 days in the accounting year, in an establishment employing 20 or more people (or one notified by the appropriate government). New employees, and those who worked only part of the year, still qualify but receive a proportionate bonus for the months actually worked. Employees earning above ₹21,000 Basic+DA are outside the Act, though some employers pay an ex-gratia amount on similar terms as a matter of policy.

    When must bonus be paid?

    Statutory bonus must generally be paid within eight months of the close of the accounting year. Many employers align this with Diwali or the financial year-end, but the legal deadline is independent of any festival.

    FAQ

    Statutory bonus questions, answered

    Who is eligible for statutory bonus?
    Employees whose Basic + DA is ₹21,000 or less per month, who have worked at least 30 days in the accounting year, in an establishment covered by the Payment of Bonus Act (generally 20+ employees).
    Why is my bonus calculated on ₹7,000 when my Basic is higher?
    The Act sets a separate calculation ceiling of ₹7,000/month (or the state-notified minimum wage if higher) — this is the wage used to compute the bonus amount, even though eligibility is based on the higher ₹21,000 threshold.
    Is 8.33% always the bonus rate?
    8.33% is the statutory minimum, payable even if the employer makes no profit (subject to conditions). The maximum is 20%. The actual rate an employer pays within this range depends on its allocable surplus for the accounting year.
    What is the maximum statutory bonus?
    The maximum is 20% of the calculation wage. On the ₹7,000 (or state minimum wage) ceiling for twelve months, that works out to ₹16,800 a year at 20%, versus a minimum of about ₹6,997 at 8.33%.
    By when must the bonus be paid?
    Bonus must generally be paid within eight months of the end of the accounting year, though many employers disburse it around Diwali as a matter of convention rather than legal requirement.
    Does Kredily compute statutory bonus?
    Yes. Kredily tracks eligibility, applies the calculation ceiling correctly, and computes statutory bonus per employee — free for unlimited employees on the Free Forever plan.

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