Statutory Bonus Calculator
Calculate legal employee bonus liabilities under the Payment of Bonus Act, 1965 and Chapter IV of the Code on Wages, 2019. Automatically verifies the ₹21,000 eligibility threshold, State Minimum Wage calculation ceilings, 30-day service requirements, and pro-rata allocations.
Two Distinct Ceilings: Eligibility vs Calculation Base
Under Indian labor statutes, an employee is Eligible for statutory bonus if their monthly wages do not exceed ₹21,000. However, the bonus is NOT computed on ₹21,000: it is capped at ₹7,000 or the scheduled State Minimum Wage, whichever is higher (Code on Wages § 26(2)).
Employee Bonus Parameters
Configure salary, tenure, and state jurisdiction
📑 Statutory Bonus Audit Breakdown
Payment of Bonus Act § 10, 11, 12 & Code on Wages § 26
| Calculation Component | Legal Provision | Value / Outcome |
|---|---|---|
|
Actual Monthly Wages Basic + DA remuneration |
Section 2(13) | |
|
Calculation Wage Ceiling Higher of ₹7,000 or Scheduled State Min Wage () |
Section 12 / § 26(2) | |
|
Effective Monthly Calculation Base Min(Actual Wages, Calculation Ceiling) |
Wage Base | |
|
Pro-Rata Attendance Multiplier days worked out of 300 annual working days |
Section 13 Pro-Rata | |
|
Annual Qualifying Wage Base (Effective Base × 12) × Pro-Rata Multiplier |
Annualized Base | |
| Declared Bonus Payable () | Net Payable |
Need to Compute Allocable Surplus & Prevent Labor Disputes?
Form A, B, C & D bonus registers must be filed annually under Section 19. If your establishment disputes the 20% allocable surplus or needs an audited Set-On / Set-Off schedule, consult our Senior Labor Law Partners.
Statutory Framework: How Bonus is Governed in India
Legal rules, timelines, and mandatory documentation governing bonus distribution under the Payment of Bonus Act, 1965 and Chapter IV of the Code on Wages, 2019.
8-Month Payment Deadline
Under Section 19 of the Act, bonus must be paid within a period of 8 months from the close of the accounting year (e.g., on or before November 30 for financial year ending March 31). Failure attracts penal interest and prosecution.
Set-On & Set-Off Mechanism
Under Section 15 and the Fourth Schedule, allocable surplus exceeding 20% is "Set-On" to subsequent years (up to 4 years). When surplus is deficient, the deficit is "Set-Off", ensuring financial stability while guaranteeing the 8.33% statutory floor.
Mandatory Statutory Registers
Every covered employer must maintain: Form A (Computation of Allocable Surplus), Form B (Set-On & Set-Off), Form C (Bonus Paid to Employees), and submit Form D annual return to the labor inspectorate.