Bonus Calculator – Statutory Bonus 8.33% to 20%

The two wage limits

Statutory bonus uses one limit to decide who gets it and another to size it. An employee is eligible if their monthly wages are ₹21,000 or less and they worked at least 30 days in the accounting year. The bonus is then calculated on the lower of actual wages and a ceiling. The ceiling is ₹7,000, or the state minimum wage for the employee's job if that is higher.

Worked examples

An employee earns ₹15,000 a month and the minimum wage for the job is ₹12,000. Bonus wages are ₹12,000 × 12 = ₹1,44,000. At the minimum 8.33%, bonus is ₹11,995.20. At the maximum 20%, it is ₹28,800.

An employee who joined in September earns ₹18,000 and worked 7 months. With no higher minimum wage entered, the ceiling is ₹7,000, so bonus wages are ₹49,000 and the minimum bonus is ₹4,081.70.

Between 8.33% and 20%

8.33% is owed whether or not the business made a profit, subject to a floor of ₹100. Anything above that depends on the allocable surplus, a share of the year's profit worked out under the Code, and is capped at 20%. Surplus above 20% carries forward to later years, and a shortfall can be set off against later surplus.

Deductions and disqualification

• A festival or customary bonus paid during the year counts toward the statutory amount.
• An interim bonus paid in advance is also deducted.
• An employee dismissed for fraud, riotous or violent behaviour, theft, misappropriation, sabotage or sexual harassment on the premises loses the bonus for that year.

When to pay

Bonus is due within eight months of the end of the accounting year, so by 30 November for a year ending 31 March. It is taxable as salary, so deduct TDS in the month it is paid. For an employee who leaves mid-year, add the part-year bonus to the full and final settlement.