Statutory Bonus Calculator

Work out the statutory bonus payable under the Payment of Bonus Act. The full report shows the minimum-to-maximum range, eligibility, and the set-on / set-off rule employers get wrong.

Statutory rates maintained by the TMS compliance team · Last updated 2026-07-06 · Please re-verify against the official government notification before relying on them.

Minimum bonus payable / year

₹0

Full report ready

The minimum is only the floor

You are seeing the 8.33% minimum. The full report shows the 20% maximum, who qualifies, and how set-on / set-off changes your liability.

Maximum bonus (20%)

The ceiling you may have to pay

₹0,00,000

Eligibility check

Whether this employee is covered

₹0,00,000

Calculation wage base

The ₹7,000 / minimum-wage cap applied

₹0,00,000

Set-on / set-off note

How prior years affect this year

₹0,00,000

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How statutory bonus is calculated

Under the Payment of Bonus Act, eligible employees are entitled to an annual bonus between a statutory minimum and maximum of their salary or wage. TMS calculates and disburses this correctly across your workforce.

The rules that apply

Applicability — establishments employing 20 or more people.
Eligibility — employees drawing wages up to ₹21,000 per month.
Minimum bonus — 8.33% of the employee’s salary or wage for the year.
Maximum bonus — 20%, payable when allocable surplus allows.
Calculation ceiling — computed on wages capped at ₹7,000 per month or the applicable minimum wage, whichever is higher.
Payment window — within 8 months of the close of the financial year.

Worked example

An employee earning ₹18,000 per month is eligible (under the ₹21,000 ceiling). At the minimum 8.33% on the ₹7,000 base the annual bonus is about ₹6,997; at 20% it is about ₹16,800. The calculator above shows the figure for your exact wages and rate.

Frequently asked questions

Who is eligible for statutory bonus?

Employees drawing up to ₹21,000 per month in an establishment with 20 or more employees, after 30 working days in the year.

What are the minimum and maximum bonus rates?

Minimum 8.33% and maximum 20% of the employee’s annual salary or wage.

What wage is the bonus calculated on?

On wages capped at ₹7,000 per month or the applicable minimum wage, whichever is higher.

Can TMS manage bonus and full payroll compliance?

Yes — see Payroll Outsourcing and Statutory Compliance.

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How statutory bonus actually works

Two different ceilings do two different jobs here, and mixing them up is the single most common error we see in in-house payroll.

The eligibility ceiling decides who gets a bonus. An employee drawing wages up to ₹21,000 a month is covered by the Payment of Bonus Act, 1965. Above that, the Act does not compel you to pay, though many employers still do as a matter of policy.

The calculation ceiling decides what the bonus is computed on. That is ₹7,000 a month, or the applicable minimum wage for the scheduled employment if it is higher. It is not the employee's actual salary.

A worked example

An employee earns ₹18,000 a month. They are under the ₹21,000 ceiling, so they are eligible.

The bonus is not calculated on ₹18,000. It is calculated on the ₹7,000 cap (or the higher minimum wage, if one applies)
Minimum bonus at 8.33 percent: ₹7,000 × 12 × 8.33% = about ₹6,997 for the year
Maximum bonus at 20 percent: ₹7,000 × 12 × 20% = ₹16,800 for the year

Where you land between those two figures is decided by allocable surplus, and by the set-on and set-off carried from previous years. It is not a free choice.

Now take an employee on ₹25,000. They sit above the eligibility ceiling, so the Act does not require a bonus at all. If you pay one anyway, it is contractual, not statutory, and it should be documented as such so it does not create an expectation you cannot withdraw.

Set-on and set-off, without the jargon

In a good year you may generate more allocable surplus than the 20 percent maximum requires. The excess is carried forward, up to a limit, and is called set-on. In a bad year, when surplus does not cover even the 8.33 percent minimum, the shortfall is carried the other way as set-off. The point of the mechanism is that the minimum is payable whether or not you made a profit.

Timing and eligibility details that catch people out

An employee must have worked at least 30 days in the accounting year to qualify
Bonus must be paid within eight months of the close of the accounting year
Employees who joined or left mid-year are entitled on a pro-rata basis for the days worked
An employee dismissed for fraud or violent misconduct can be disqualified, but the ground has to be real and documented
Apprentices are outside the Act

Check the minimum wage for your state and scheduled employment before you compute. Where the minimum wage exceeds ₹7,000, that higher figure becomes the calculation base, and using ₹7,000 by default will understate the liability.

Statutory bonus questions

Is statutory bonus payable even if the company made a loss?

Yes. The 8.33 percent minimum is payable regardless of profit. That is the whole purpose of the set-on and set-off mechanism.

Is the bonus calculated on gross salary?

No, and this is the most common mistake. It is calculated on ₹7,000 a month or the applicable minimum wage if higher, not on what the employee actually earns.

Who is excluded from statutory bonus?

Employees drawing above ₹21,000 a month are outside the Act's mandate, as are apprentices. Anyone with fewer than 30 working days in the year does not qualify.

When does bonus have to be paid?

Within eight months of the end of the accounting year. Late payment is a recoverable claim and attracts penalty exposure.

Do employees who resigned mid-year still get a bonus?

Yes, pro-rata for the period worked, provided they completed at least 30 working days in that year.

Statutory Bonus Calculator (Payment of Bonus Act)

Every eligible employee drawing wages up to ₹21,000 a month is entitled to a statutory bonus under the Payment of Bonus Act, 1965. The bonus ranges from a minimum of 8.33% to a maximum of 20% of the eligible wage, and must be paid within eight months of the close of the accounting year. This calculator gives you the figure instantly; the full report adds the eligibility rules and the set-on/set-off working that decides exactly where in that band you land.

How statutory bonus is calculated

Bonus is computed on the lower of the employee's actual wages or the ₹7,000 (or applicable minimum-wage) ceiling. At 8.33% this is the guaranteed minimum every covered employer must pay, regardless of profit. The 20% ceiling applies when allocable surplus is high. Getting the allocable-surplus, set-on and set-off calculations right is where most in-house teams slip, either overpaying or exposing themselves to a claim.

Who is eligible for statutory bonus?

Employees who have worked at least 30 days in the accounting year and draw wages up to ₹21,000 per month are covered. The Act applies to establishments with 20 or more employees. New businesses have a limited exemption in their initial years.

Frequently asked questions

Is statutory bonus mandatory even if my company makes a loss?
Yes. The 8.33% minimum bonus is payable irrespective of profit or loss for all covered establishments.

What is the last date to pay statutory bonus?
Within eight months from the end of the accounting year.

How is the ₹7,000 ceiling applied?
Bonus is calculated on the lower of actual wages or ₹7,000 (or the state minimum wage for the category, whichever is higher).

Statutory Bonus Calculator

How statutory bonus is calculated

The rules that apply

Worked example

Frequently asked questions

Who is eligible for statutory bonus?

What are the minimum and maximum bonus rates?

What wage is the bonus calculated on?

Can TMS manage bonus and full payroll compliance?

Get a compliance review in 24 hours.

More free HR calculators & tools

How statutory bonus actually works

A worked example

Set-on and set-off, without the jargon

Timing and eligibility details that catch people out

Statutory bonus questions

Is statutory bonus payable even if the company made a loss?

Is the bonus calculated on gross salary?

Who is excluded from statutory bonus?

When does bonus have to be paid?

Do employees who resigned mid-year still get a bonus?