Last Updated on November 14, 2026 by Abhijit Divekar
For employers. Updated 14 November 2026.
Does the bonus rule apply to your business?
It applies if 20 or more people were employed on any day during the accounting year (Code on Wages, 2019, section 41(2)). Count everyone on your rolls on your busiest day, not just permanent staff.
A few employers are outside it, including universities and other educational institutions, hospitals and other bodies run not for profit, and government departments and local authorities (section 41(1)).
For most businesses the accounting year runs from April to March, so this deadline covers April 2025 to March 2026.
Which employees must get it?
An employee qualifies if their wages are ₹21,000 a month or less and they worked at least 30 days in the year. Someone who joined late or left early still qualifies, with the bonus reduced in proportion to the days worked (section 27). Paid leave, maternity leave, lay-off and time off after an accident at work all count as days worked (section 28).
The only people who lose it are those dismissed for fraud, violent behaviour at work, theft or sabotage, or a conviction for sexual harassment (section 29).
How much do you have to pay?
| Rule | What the Code says |
|---|---|
| Minimum | 8⅓% of wages, or ₹100 if that is higher, whether or not you made a profit (section 26(1)) |
| Maximum | 20% of wages, only if your allocable surplus is large enough (section 26(3)) |
| Wages used for the calculation | ₹7,000 a month, or the minimum wage for that job if it is higher (section 26(2)) |
Worked example
Priya earns ₹15,000 a month. The minimum wage for her job in her state is ₹12,000 a month.
- She qualifies, because ₹15,000 is under ₹21,000.
- Her bonus is worked out on ₹12,000, the higher of ₹7,000 and her minimum wage.
- Minimum bonus for a full year: ₹12,000 × 12 months × 8⅓% = ₹12,000.
- If your surplus allows the full 20%, it would be ₹28,800.
Where no minimum wage applies, or it is below ₹7,000, the calculation uses ₹7,000 and the minimum bonus is ₹7,000 for the year.
Tip: 8⅓% is exactly one-twelfth. Rounding it down to 8.33% leaves you a few rupees short for every employee.
What counts as paying on time?
The bonus must be credited to the employee’s bank account within 8 months of the end of the accounting year (section 39(1)). For an April to March year, that is by 30 November 2026. Paying in cash does not meet the rule.
If you need more time, you can apply to the government before the deadline with your reasons. Extensions can never take the total past 2 years.
Already paid a Diwali or puja bonus this year? You can subtract it and pay only the balance (section 37).
What happens if you pay late or pay less?
Paying an employee less than the Code requires carries a fine of up to ₹50,000. A repeat offence within 5 years can mean up to 3 months in prison, a fine of up to ₹1 lakh, or both (section 54(1)). The unpaid bonus still has to be paid on top of any fine.
Your checklist before 30 November
- Check your highest headcount in 2025-26. If it never reached 20, the bonus rule does not apply.
- List everyone whose wages were ₹21,000 a month or less and who worked at least 30 days.
- For each person, take the higher of ₹7,000 and the minimum wage for their job.
- Work out 8⅓% of that for the months they actually worked.
- Subtract any Diwali or puja bonus already paid this year.
- Credit the balance to their bank accounts by 30 November.
- Keep a register of what you paid, to whom and when. Inspectors ask for it.
Work it out with the bonus calculator →
Delhi employers: read the 2026 bonus advisory →
Frequently asked questions
What is the last date to pay statutory bonus for 2025-26?
30 November 2026, for employers whose accounting year ends on 31 March. The bonus must be credited to the employee’s bank account within 8 months of the end of the year.
Do I have to pay bonus if my business made a loss?
Yes. The minimum bonus of 8⅓% of wages (at least ₹100) is due whether or not you have any profit. Only the amount above the minimum depends on profit.
Does statutory bonus apply to a company with fewer than 20 employees?
No. The bonus chapter of the Code on Wages applies only where 20 or more people were employed on any day in the accounting year.
Can I count the Diwali bonus I already paid?
Yes. A puja or other customary bonus paid during the year can be subtracted from the statutory bonus, and you pay only the difference.
What is the penalty for not paying statutory bonus?
A fine of up to ₹50,000. A repeat offence within 5 years can bring up to 3 months in prison or a fine of up to ₹1 lakh, or both.
HRTailor runs payroll and statutory compliance for companies with 5 to 100 employees, including the yearly bonus calculation, PF, ESI and every state filing.
Employees: HRTailor helps employers run payroll. We do not pay bonuses to staff of other companies. For a question about your own bonus, please speak to your employer’s HR team.
Sources: Code on Wages, 2019, sections 26, 27, 28, 29, 37, 39, 41 and 54 (India Code); Central Government notifications S.O. 4710(E) and S.O. 4711(E) dated 25 August 2026 on the ₹21,000 eligibility limit and ₹7,000 calculation ceiling. A guide for employers, not legal advice. Last checked 14 November 2026.
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