Every employee drawing monthly salary/wage (Basic + DA) up to ₹21,000 per month is covered under the statutory scope. Employees earning above ₹21,000/month fall outside the statutory entitlement of the Act.

Where an employee's salary exceeds ₹7,000 per month (or the minimum wage for scheduled employment as fixed by the State Government, whichever is higher), the bonus is computed as if their salary were ₹7,000/month or the scheduled minimum wage.

Under Section 10, a minimum bonus of 8.33% (or ₹100 floor) is mandatory regardless of whether the employer has made a profit. Under Section 11, the maximum bonus payable is capped at 20.00% based on allocable surplus and set-on/set-off rules under Section 15.

An employee must work at least 30 working days in an accounting year (Section 8). Under Section 14, days on lay-off, paid leave, accident disablement, and maternity leave count as working days. Incomplete years result in proportionate reduction under Section 13.