What is statutory bonus under the Payment of Bonus Act, 1965?

Statutory bonus is a mandatory annual statutory payment payable to eligible employees in factories and establishments employing 20 or more persons, calculated on salary/wages as per statutory rules.

What is the current salary eligibility ceiling for statutory bonus?

Under Section 2(13) as amended by Act 6 of 2016, employees drawing Basic Salary + Dearness Allowance up to ₹21,000 per month are eligible for statutory bonus.

Is an employer legally obligated to pay 8.33% bonus even during business losses?

Yes. Section 10 mandates payment of a minimum bonus of 8.33% of the eligible wage base (or ₹100, whichever is higher) irrespective of whether the employer has allocable surplus or derived profits in that accounting year.

What is the maximum bonus percentage under Section 11?

Under Section 11, where the allocable surplus exceeds the amount of minimum bonus, the employer is required to pay bonus up to a maximum of 20.00% of the employee's eligible wage base.

What is the statutory deadline for employers to disburse bonus?

Under Section 19, statutory bonus must be paid in cash within 8 months from the close of the accounting year.

Statutory Bonus Calculator | Payment of Bonus Act 1965 | SKM Laws

Q: What is the statutory calculation ceiling under Section 12?

Under Section 12, the calculation ceiling is ₹7,000 per month or the minimum wage for scheduled employment fixed by the appropriate Government, whichever is higher.

Statutory Bonus Input Form

Statutory Bonus Computation Form

Monthly Basic Salary + DA (₹) *

Employees earning up to ₹21,000/month are eligible under Section 2(13).

Days Worked in Accounting Year (Days) *

Min 30 working days required under Section 8. Includes deemed days (lay-off, paid leave, maternity) under Section 14.

Declared Bonus Rate (8.33% to 20%) *

8.33%

Payment of Bonus Act, 1965

Statutory Bonus Determination

ELIGIBLE UNDER ACT

Net Estimated Payable Bonus

₹7,000

Disbursement mandatory within 8 months from close of accounting year (Sec 19).

Statutory Calculation Base (Sec 12)

₹7,000 / Month

Capped at statutory ceiling of ₹7,000

Days Worked in Accounting Year (Sec 8 & 13)

300 Days (100.0% tenure)

Annual Base: ₹84,000

Statutory Minimum Bonus (8.33%) (8.33% - Sec 10)

₹7,000

Guaranteed baseline (irrespective of profit)

Statutory Maximum Bonus (20.00%) (20.00% - Sec 11)

₹16,800

Ceiling subject to allocable surplus

Statutory Notes & Guardrails

• Under Section 19 of the Payment of Bonus Act, 1965, statutory bonus must be disbursed in cash within 8 months from the close of the accounting year.

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This calculator provides an indicative statutory computation under the Payment of Bonus Act, 1965 based on user-provided wage and working tenure inputs. Actual bonus entitlement may depend on establishment coverage (20+ employees), allocable surplus computation under Sections 4 to 7, set-on/set-off under Section 15, and lawful deductions under Sections 17 and 18. This tool does not constitute a formal legal opinion or binding determination.

Core Statutory Principles of the Payment of Bonus Act, 1965

1. Eligibility Wage Ceiling (Section 2(13))

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.

2. Statutory Calculation Ceiling (Section 12)

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.

3. Minimum (8.33%) & Maximum (20.00%) Bonus (Sec 10 & 11)

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.

4. Working Days, Deemed Days & Proportionate Reduction (Sec 8, 13 & 14)

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.

Frequently Asked Questions — Statutory Bonus Law

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