Bonus calculator for statutory and performance bonuses
This bonus calculator covers both kinds of bonus paid in India. Statutory bonus is the yearly minimum the law guarantees lower-paid staff — 8⅓% to 20% of capped wages. Performance bonus is variable pay, usually a percentage of CTC or basic pay times company and individual ratings; for it, the calculator also estimates the income tax.
The statutory rules now sit in the Code on Wages, 2019, which replaced the Payment of Bonus Act, 1965 on 21 November 2025. On 25 August 2026 the Labour Ministry notified the two figures the Code left open — eligibility for wages up to ₹21,000 a month, and calculation on ₹7,000 or the minimum wage, whichever is higher — for establishments under the Central Government, with effect from 21 November 2025. States are expected to issue their own notifications.
Nothing you paste is uploaded. Treat the figures as estimates, not legal or tax advice.
How to use the Bonus Calculator
- Choose Statutory bonus or Performance bonus.
- For statutory bonus, list employees as name, monthly wages and months worked, and check the limits under Eligibility limit and calculation ceiling.
- Set the Bonus rate, or enter the Allocable surplus to let the calculator pick the rate, then choose the Accounting year for the payment deadline.
- For performance bonus, choose what it is based on and enter the target, the company and individual multipliers.
- Pick the Income tax method and your taxable income before the bonus to see the bonus after tax.
Bonus Calculator features
Ceiling-aware statutory bonus
Caps bonus wages at ₹7,000 or the minimum wage, skips ineligible employees and applies the ₹100 minimum pro rata.
Allocable surplus helper
Sets the rate between 8⅓% and 20% from the surplus, with any set-on or set-off.
Payment deadline
Eight months after the accounting year closes.
Performance payout maths
Target × company multiplier × individual multiplier, from CTC, basic pay or a fixed target.
Bonus after tax
Tax with and without the bonus, including rebate, marginal relief, surcharge and cess.
Statutory bonus formula with an example
Statutory bonus = rate × wages earned in the year, counting monthly wages above the ceiling at the ceiling. The minimum is 8⅓% (one-twelfth, often shown as 8.33%) or ₹100, whichever is higher; the maximum is 20%. Wages are basic pay, DA and retaining allowance, raised to half of total pay where allowances exceed half.
| Employee | Monthly wages | Months | Bonus wages | At 8⅓% | At 20% |
|---|---|---|---|---|---|
| Asha | ₹15,000 | 12 | ₹84,000 | ₹7,000 | ₹16,800 |
| Ravi | ₹6,500 | 12 | ₹78,000 | ₹6,500 | ₹15,600 |
| Meena | ₹18,000 | 7 | ₹49,000 | ₹4,083 | ₹9,800 |
| Kiran | ₹24,000 | 12 | Not eligible | — | — |
| Total | ₹2,11,000 | ₹17,583 | ₹42,200 |
Allocable surplus, set-on and set-off
Above the minimum, the rate depends on profits. The allocable surplus — a set share of the available surplus from the accounts — is paid out between 8⅓% and 20%. Any excess over the 20% amount (up to 20% of the employees’ wages) is set on for up to four years; if the surplus is below the minimum, the minimum is still paid and the shortfall is set off against later years.
In the example above, a surplus of ₹30,000 pays 14.22%; ₹1,00,000 pays the full 20% and sets on ₹57,800; ₹10,000 still pays the ₹17,583 minimum and sets off ₹7,583.
Eligibility, disqualification and deadline
- Eligible: wages up to ₹21,000 a month and at least 30 working days in the year. Days on paid leave, lay-off, maternity leave or accident-related absence count as worked.
- Part year: the bonus is on wages actually earned, and the ₹100 floor is reduced proportionately.
- Disqualified: dismissal for fraud, riotous or violent behaviour on the premises, theft, misappropriation or sabotage, or conviction for sexual harassment.
- Deadline: credit to the employee’s bank account within eight months of the end of the accounting year — 30 November 2026 for April 2025–March 2026.
How a performance bonus is taxed
A performance bonus is salary, taxed in the year received at your marginal rate, with TDS in the payout month. Example: CTC ₹12 lakh, target 10% (₹1,20,000), multipliers 110% and 120% give ₹1,58,400. On ₹15 lakh of taxable income (new regime), tax rises from ₹1,09,200 to ₹1,36,947: ₹27,747 (17.5%) goes in tax and ₹1,30,653 reaches you.
Watch the rebate line: on ₹11.5 lakh of income, a ₹1 lakh bonus costs ₹52,000 in tax, because crossing ₹12 lakh loses the rebate and marginal relief only softens it. New-regime slabs for 2026-27 are nil up to ₹4 lakh, then 5%, 10%, 15%, 20% and 25% in ₹4 lakh steps, and 30% above ₹24 lakh. For your full-year tax use the income tax calculator; to see monthly take-home pay, try the in-hand salary calculator.
Rules used (as of October 2026)
- Code on Wages, 2019, Chapter IV (bonus) — in force from 21 November 2025, replacing the Payment of Bonus Act, 1965.
- S.O. 4711(E), 25 August 2026 — eligibility for wages up to ₹21,000 a month; S.O. 4710(E) — calculation on ₹7,000 or the Central Government minimum wage, whichever is higher. Both apply from 21 November 2025 to establishments under the Central Government.
- State notifications were still awaited; which minimum wage applies in state-sphere establishments is unclear, so enter the one for your employment.
- Income tax — Income-tax Act, 2025 from 1 April 2026; Budget 2026 left the 2025-26 slabs, rebates and the 4% cess unchanged for 2026-27.
Bonus Calculator FAQ
How is statutory bonus calculated?
Multiply the rate (8⅓% to 20%) by wages earned in the year, counting monthly wages above ₹7,000 (or a higher minimum wage) at that ceiling. A year on ₹15,000 gives ₹7,000 at 8⅓%; this bonus calculator does a whole list.
Who is eligible for statutory bonus in 2026?
Employees whose wages are ₹21,000 a month or less and who worked at least 30 days in the accounting year, unless dismissed for fraud, violence, theft or sabotage, or convicted of sexual harassment.
Is bonus 8.33% of basic pay or of gross salary?
Of wages as the Code on Wages defines them — basic pay, DA and retaining allowance, topped up to half of total pay where needed — and capped at the calculation ceiling. It is not a percentage of gross salary or CTC.
When must the statutory bonus be paid?
Within eight months of the end of the accounting year, credited to the employee’s bank account. For April 2025–March 2026 that is 30 November 2026.
How much tax will I pay on my bonus?
The bonus is added to your salary and taxed at your marginal slab, plus 4% cess. Compare your tax with and without it; near ₹12 lakh under the new regime the extra tax can be far higher than the slab rate.