BONUS CALCULATOR
Two ceilings decide the answer.
One ceiling decides who is eligible. A different, lower ceiling decides what the bonus is calculated on. Confusing the two is the most common error.
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Fields are pre-filled with typical values — type your own or drag the sliders, and everything recalculates instantly. Nothing is sent to a server.
Basic plus dearness allowance.
Statutory minimum is 8.33% and maximum is 20%.
Calculated on FY 2025-26 statutory rates. Indicative only — confirm against current notifications before filing.
Statutory bonus payable
₹6,997
Wage used for calculation
₹7,000
Months counted
12
Bonus rate applied
8.33%
Statutory bonus on the capped calculation wage
Full breakdown
Step-by-step calculation
HOW IT WORKS
The formula used
Eligibility is assessed on actual wages, but the bonus itself is computed on a capped wage.
Monthly wage ≤ ₹21,000min(monthly wage, ₹7,000 or minimum wage)Calculation wage × months worked × rateMinimum 8.33%, maximum 20%UNDERSTANDING IT
About the bonus calculator
Statutory bonus is a legal entitlement rather than a discretionary payment. It applies to employees earning up to a wage limit, and it is payable annually, most commonly around the festival season.
The structure catches many employers out because two different ceilings apply. The eligibility ceiling determines who qualifies. A separate and much lower calculation ceiling determines the wage on which the bonus is computed. An employee earning ₹18,000 a month is eligible, but their bonus is calculated on ₹7,000, not ₹18,000.
The rate is bounded: a minimum of 8.33% must be paid regardless of profitability, and a maximum of 20% applies. Anything above that is a discretionary performance bonus rather than statutory bonus.
Worked example
Take a monthly wage of ₹18,000 for a full year at the minimum rate.
The employee is eligible because ₹18,000 is within the ₹21,000 limit. The calculation wage is capped at ₹7,000. Bonus is ₹7,000 × 12 months × 8.33%, which is ₹6,997 for the year. At the maximum 20% rate it would be ₹16,800.
WHY IT HELPS
What this calculator is good for
Apply both ceilings correctly
Eligibility and calculation ceilings are different figures serving different purposes.
Model minimum and maximum
Compare the 8.33% floor against the 20% cap for provisioning.
Prorate part years
Employees who joined mid-year receive bonus for months actually worked.
WATCH OUT
Common mistakes
These are the errors that most often produce a wrong number.
Calculating bonus on actual wages instead of the capped calculation wage.
Treating the eligibility ceiling and the calculation ceiling as the same number.
Paying below the 8.33% statutory minimum in a loss-making year.
Paying bonus outside payroll, which bypasses correct tax treatment.
HR TIPS
Practical guidance
Provision through the year
Accruing monthly avoids a single large hit in the festival season.
Pay through payroll
Bonus is taxable salary income and should carry proper tax deduction.
Separate statutory from performance
Discretionary bonus above the statutory maximum should be accounted separately.
QUESTIONS
Bonus Calculator — frequently asked
Employees earning monthly wages up to ₹21,000 who have worked for at least the qualifying number of days in the accounting year.
8.33% of the calculation wage, payable regardless of whether the establishment made a profit.
The Act caps the wage used for calculation at ₹7,000 per month or the applicable minimum wage, whichever is higher, even though eligibility is assessed on actual wages up to ₹21,000.
Yes. Bonus forms part of taxable salary income in the year it is received.
Results are indicative and computed on FY 2025-26statutory rates using conventional salary-structure assumptions. Your actual figures depend on your employer’s structure, your state and your declarations. Confirm against current notifications before relying on these numbers for filing.
Run this on real payroll, not a calculator
Stop calculating payroll in a spreadsheet. BizzField Payroll runs the whole cycle, applies every statutory rule and files what regulators expect.