Reviewed by Finin2min Editorial Desk · Last reviewed 11 August 2026
Estimate annual statutory bonus using editable wage ceilings, minimum wage, service period and the 8.33%–20% range.
Estimate statutory annual bonus
Indicative bonus
Current wage-code rules and the appropriate government’s notifications must be checked.
Monthly calculation wage
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Estimated annual bonus
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Component
Amount
Bonus at 8.33%
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Bonus at 20%
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How This Is Calculated
Under the Payment of Bonus Act, an employee is eligible for statutory bonus if their monthly wage is within the eligibility ceiling and they have worked at least 30 days in the accounting year. The bonus is calculated on "calculable salary" (wage capped at the statutory calculation ceiling), with a minimum bonus of 8.33% and a maximum of 20% of that calculable salary per year, depending on the employer's "available surplus" as defined under the Act.
Frequently Asked Questions
What is the minimum statutory bonus percentage?
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The minimum statutory bonus under the Payment of Bonus Act is 8.33% of the employee's calculable salary for the accounting year, payable even if the employer has no "available surplus" that year.
What is the maximum statutory bonus percentage?
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The maximum statutory bonus is 20% of calculable salary, payable only if the employer's available surplus (as defined under the Act's formula) is high enough to support it.
Who is eligible for statutory bonus?
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Employees whose monthly wage is within the government-notified eligibility ceiling, and who have worked at least 30 days in the accounting year, are eligible — subject to exclusions like dismissal for fraud, riotous behaviour, or causing loss to the employer by misconduct.
Is bonus calculated on full wage or a capped wage?
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Bonus is calculated on "calculable salary," which is the employee's wage capped at the statutory calculation ceiling — even if actual wages are higher, the bonus computation uses this capped figure, not the full salary.
Source and review trail
Use the current official instrument, portal or regulator publication before acting.
Scope: Computes statutory bonus payable under the Payment of Bonus Act, 1965 (now within the Code on Wages, 2019 framework), based on the eligible employee's salary/wage and the establishment's allocable surplus.
Calculation logic
Eligibility: an employee drawing wages/salary up to the currently prescribed eligibility ceiling, who has worked for at least 30 working days in the accounting year, in an establishment covered under the Act (factories, and other establishments employing 20 or more persons).
Bonus computation base ('bonus wage'): capped at the currently prescribed bonus-computation ceiling (a separate, generally lower figure than the eligibility ceiling — an employee earning between the bonus-computation ceiling and the eligibility ceiling has their bonus computed as if they earned only the bonus-computation ceiling amount).
Bonus rate: minimum 8.33% of bonus wage (statutory minimum, payable even if the establishment has no allocable surplus or incurs a loss, subject to specific set-off/carry-forward provisions for loss-making establishments in their early years) up to a maximum of 20% of bonus wage, with the actual percentage within this range determined by the establishment's allocable surplus for the accounting year per the Act's specific allocable-surplus formula.
Inputs and assumptions
Eligibility ceiling and bonus-computation ceiling are both currently prescribed figures under the Act/Code as amended — these are two DISTINCT figures (not the same threshold used for both purposes), which the calculator applies separately.
The 8.33% minimum and 20% maximum bonus rates, and the specific allocable-surplus computation methodology (which involves adjustments to the establishment's gross profit per Schedules to the Act), follow the current statutory formula.
Exclusions and edge cases
A newly set-up establishment has a specific exemption from the bonus obligation for its first 5 accounting years (except in the year profit is actually earned), per a specific transitional provision — the calculator applies this exemption where the user indicates the establishment is within this window.
This calculator computes the STATUTORY minimum/maximum bonus range; many employers pay a discretionary 'ex-gratia' bonus in addition to or in lieu of the statutory bonus, which is a matter of employer policy/contract, not itself computed by this Act-specific calculator.