How Much Statutory Bonus Am I Entitled To?

The ₹100 floor — a detail most summaries skip

Section 26(1) of the Code on Wages, 2019 doesn't just say "8.33% of wages" for the minimum bonus. It says:

"...an annual minimum bonus calculated at the rate of eight and one-third per cent. of the wages earned by the employee or one hundred rupees, whichever is higher whether or not the employer has any allocable surplus during the previous accounting year."

In practice this floor rarely binds — 8.33% only drops below ₹100 at very low annual wages — but it's in the statute, and it means the minimum bonus is never zero for an eligible employee, even in a year with no allocable surplus at all.

How the maximum (up to 20%) actually gets decided

The employer doesn't choose a number between 8.33% and 20% freely. It's driven by "allocable surplus" — a defined calculation (Sections 31–36 of the Code) starting from the employer's gross profits, working through prescribed deductions (depreciation, direct tax) to an "available surplus," of which 67% (60% for a banking company) becomes the "allocable surplus" the bonus is actually paid from. If that allocable surplus, divided across eligible employees' wages, would produce more than 8.33%, the employer must pay the higher figure — capped at 20%. If it would produce less than 8.33%, the employer still owes at least 8.33% (or ₹100), because the minimum applies "whether or not the employer has any allocable surplus."

This is also why a colleague at a different, more profitable employer can legally receive a much higher statutory bonus percentage than you for the same kind of work — the percentage is tied to each employer's own allocable surplus, not a single economy-wide rate.

The 30-day minimum service rule

You need to have "put in at least thirty days work in an accounting year" to be eligible at all — this is in Section 26(1) directly. "Worked" is defined generously under Section 28: days you were laid off under an agreement or standing orders, days on paid leave, days absent due to a work-related accident, and days on paid maternity leave all count toward the 30 days, even though you weren't physically working.

Didn't work the full year? Section 27's proportionate reduction

If you cleared the 30-day threshold but didn't work every working day in the accounting year — joined partway through, for instance — Section 27 reduces the minimum bonus proportionately, calculated against the wages you actually earned for the days you worked, not a full year's wages. You don't lose eligibility for working less than a full year; the bonus amount itself scales down.

Worked example

An eligible employee earns ₹18,000/month in wages relevant for bonus purposes (below the current ₹21,000 eligibility ceiling), works the full accounting year, and the employer's allocable surplus that year supports the statutory maximum:

• Minimum guaranteed, regardless of employer performance: 8⅓% (exactly 1/12) × ₹2,16,000 (12 months' wages) = ₹18,000 — comfortably above the ₹100 floor. Note the statute's "eight and one-third per cent." is exact, not a rounding of 8.33%; using 8.33% as a decimal approximation instead of the true 1/12 fraction would understate this figure slightly.
• Maximum possible, if allocable surplus supports it: 20% × ₹2,16,000 = ₹43,200.
• Actual bonus: whatever the allocable-surplus calculation for that employer and year produces, bounded by these two figures.

Related reading

• Statutory bonus eligibility & wage ceiling — confirm you're covered before calculating anything.
• When must statutory bonus be paid? — deadlines and which establishments are covered.
• Is statutory bonus taxable? — what you actually take home from the figure calculated here.