Bonus Calculator

How to Use the Calculator

• Enter your monthly Basic + DA. Only these two count for bonus calculation. HRA, conveyance, special allowance, and other components are not included.
• Enter the bonus percentage your employer has declared, between 8.33% (the statutory minimum) and 20% (the statutory maximum).
• Enter the minimum wage notified for your scheduled employment in your state. If you do not know it, check your state labour department's most recent notification.
• Click Calculate. The right panel shows your eligible salary (after the calculation cap), your monthly bonus, your annual bonus, and the share of your eligible salary that the bonus represents.
• If your salary exceeds the Rs 21,000 statutory eligibility level or if your percentage is outside of the 8.33% to 20% range, the tool will notify you that the amount is instructive rather than a legal entitlement.

How the Bonus Calculation Actually Works

The rule has three moving parts, and getting them in the right order matters.

Step 1: Are you eligible? Employees who have worked at least 30 days during the accounting year and get monthly salaries (Basic + DA) of Rs 21,000 or less are covered under the bonus statute. Factories with ten or more employees and other businesses employing twenty or more workers are covered by the Act. Anything your company gives you beyond Rs 21,000 is a discretionary ex-gratia rather than a statutory incentive.

Step 2: What is the calculation base? The bonus is not computed using your whole Basic + DA, even if you qualify. It is computed using a capped salary. The monthly ceiling is Rs 7,000 or the minimum pay that is set for your job, whichever is higher. Therefore, in a state where the applicable minimum wage is Rs 9,500, an employee earning Rs 18,000 has a calculating base of Rs 9,500 rather than Rs 18,000.

Step 3: What percentage applies? The statutory bonus has a minimum of 8.33% and a maximum of 20%. The element that usually shocks employers is the 8.33%, which must be paid even if the business loses money. Only when the allocable excess from profits supports it does the 20% apply. Depending on the employer's surplus position, the actual proportion in any given year falls somewhere in that range.

So the final formula is: Annual Bonus = min(Basic + DA, max(7,000, minimum wage)) x 12 x bonus%. That is the same calculation the tool is running behind the scenes.

What Changed in November 2025

The Payment of Bonus Act, 1965, was the operative law for sixty years. From 21 November 2025, it has been subsumed into the Code on Wages, 2019, which is one of the four consolidated labour codes the government has been rolling out. The good news for anyone using this calculator is that the eligibility ceiling, the calculation ceiling, and the 8.33% to 20% range have been carried over unchanged. Day to day, the numbers are the same. The legal citation is different.

Payment Timing and Practical Notes

After the accounting year concludes, statutory bonuses must be paid within eight months. The bonus must be in the employee's account by November 30 of the following year for the majority of Indian enterprises that operate on an April-to-March cycle. According to the Code on Wages, late payments constitute a violation of compliance, and the punishment for non-payment is criminal rather than merely civil.

For employees above the Rs 21,000 ceiling, what an employer pays in October or November as "bonus" is usually discretionary bonus or performance-linked bonus. These are part of the compensation contract, not the statute, and the calculation rules above do not apply. Treat anything you see in your offer letter or appraisal document under those headings as discretionary unless the salary is in the statutory band.

Where Bonus Sits in Your Pay

One portion of your yearly salary is your statutory bonus. The CTC Calculator calculates your monthly take-home after deductions so you can see your whole income structure and how the components add up, including your full salary structure. TankhaPay's payroll software determines the eligibility cut-off, applies the calculation ceiling, and makes the payout within the eight-month window without the need for human workarounds for companies processing statutory bonuses in addition to statutory compliance at scale.