Statutory Bonus
Statutory Bonus Calculation (India)
The Payment of Bonus Act, 1965 mandates that employers pay a statutory bonus to eligible employees. It acts as a reward for the employee's contribution to the organization's efficiency.
Eligibility Criteria
- Employees earning a basic salary + DA of up to ₹21,000 per month.
- Must have worked for at least 30 days in the financial year.
Calculation Rules (As of 2024)
Min Bonus: 8.33% of Basic + DA (Max ₹7,000 calculation ceiling).
Max Bonus: 20% of Basic + DA.
If Salary > ₹7,000, the calculation is done on ₹7,000 or Minimum Wages, whichever is higher, not the absolute Basic Salary.
Max Bonus: 20% of Basic + DA.
If Salary > ₹7,000, the calculation is done on ₹7,000 or Minimum Wages, whichever is higher, not the absolute Basic Salary.
FAQ
Is bonus taxable?
Yes, the statutory bonus is fully taxable as part of your "Income from Salary" in the year it is received.