- The minimum is 8.33% of wages or ₹100, whichever is higher, even without a profit.
- Eligibility covers wages up to ₹21,000 a month, under a notification of 25 August 2026.
- Bonus is calculated on ₹7,000 a month or the minimum wage, whichever is higher.
- It must be credited to the employee’s bank account within 8 months of the accounting year’s close.
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Who is eligible for statutory bonus under the Code on Wages?
Any employee whose wages are up to ₹21,000 a month and who worked at least 30 days in the accounting year.
Both ceilings were notified on 25 August 2026 and apply retrospectively from 21 November 2025, as SCC Online’s report on the bonus notifications explains. “Wages” here follows the Code on Wages definition. So a structure that pushes allowances past half of pay can lift someone over the line under the 50% wage rule.
Above ₹21,000 a month, no statutory bonus is due, so any bonus you pay those employees is contractual, usually structured as variable pay tied to targets.
How is statutory bonus calculated in India?
On a capped base, not on full salary. Bonus is worked out as if monthly wages were ₹7,000, or the minimum wage if that is higher.
Let’s say a Pune office assistant earns ₹18,000 a month and worked the full year. Use the ₹7,000 base. That gives ₹84,000 a year.
| Bonus rate | Calculation | Annual bonus |
|---|---|---|
| Minimum, 8.33% | ₹84,000 × 8⅓% | ₹7,000 |
| Maximum, 20% | ₹84,000 × 20% | ₹16,800 |
Where you land between 8.33% and 20% depends on allocable surplus, a profit-based figure. No surplus? The minimum applies.
The base needs care. Read the wording. The notification refers to “the minimum wage fixed by the Central Government”. Pune’s state minimum wage already exceeds ₹7,000 at every skill level, with unskilled at ₹14,155 a month. Commentators disagree on whether state-sphere employers should use the central or the state rate, and the point isn’t settled. Hence confirm the base before you budget, because it can double the payout.
When must you pay it?
Within 8 months of year-end, under section 39 of the Code on Wages. For a year ending 31 March 2026, that’s 30 November 2026.
Many Indian employers show statutory bonus as a separate line inside CTC, and our guide to salary structure in India shows exactly where it fits in a 2026 pay structure.
How does Remunance manage statutory bonus for your India team?
Bonus is part of the statutory scope Remunance handles as employer of record, alongside gratuity, EPF and leave administration. We flag who crosses the ₹21,000 line after each revision, compute the bonus on the agreed base and credit it before the 8-month deadline. With 150+ international clients from 22 countries, we’ve seen most structures that trip this up. Before your next appraisal cycle, get your bonus liability costed.
What else do people ask about statutory bonus?
Is statutory bonus mandatory in India?
Yes, for eligible employees. The 8.33% minimum is payable whether or not the business made a profit, and section 39 requires it to be credited to the employee’s bank account.
Is statutory bonus part of CTC?
It can be. Many employers include it in CTC for eligible staff, but it must still be paid in full, on time, whatever the offer letter says.
Is statutory bonus paid to employees earning above ₹21,000?
No. The duty stops at ₹21,000 a month. Bonuses above that line are contractual, linked to performance or company results, and the minimum wage base no longer matters.
Planning a hire in India?
Our founding team has run payroll and hiring in India for 22+ years, first as Remunance Systems, which was later acquired by ADP.