Bonus Act (8.33%–20%) Calculation in Excel

Q: What is the minimum and maximum statutory bonus?

Minimum 8.33% and maximum 20% of bonus wages. On the ₹7,000 calculation cap, that is ₹6,996 to ₹16,800 per year.

Q: Who is eligible for bonus under the Bonus Act?

Employees with Basic + DA up to ₹21,000 per month who have worked at least 30 working days in the financial year.

Q: Is bonus calculated on full salary?

No. It is calculated on wages capped at ₹7,000 per month or the state minimum wage, whichever is higher — not on actual salary for higher earners.

Q: Is bonus payable in a loss-making year?

Yes. The minimum bonus of 8.33% is payable even when the employer has no allocable surplus, subject to the Act's set-on/set-off provisions.

Q: When must bonus be paid?

Statutory bonus is generally payable within 8 months of the close of the financial year (so by 30 November for an April–March FY). State rules under the Code on Wages may specify the exact date — check your state notification. ---

Last updated: 27 June 2026 · Parameters for FY 2025-26 and FY 2026-27. Formulas tested in Excel 2010 and later.

Statutory bonus under the Payment of Bonus Act is calculated in Excel as a percentage — between 8.33% (minimum) and 20% (maximum) — of the employee's annual bonus wages, where monthly wages are capped at ₹7,000 or the state minimum wage, whichever is higher. Only employees earning Basic + DA up to ₹21,000/month are eligible. The core formula is =ROUND(MIN(BasicDA,CalcCap)*12*Rate,0).

Key takeaways

Eligibility: Basic + DA up to ₹21,000/month; minimum 30 working days in the financial year.
Calculation ceiling: wages capped at ₹7,000/month or the state minimum wage, whichever is higher.
Rate range: minimum 8.33%, maximum 20% of the (capped) annual bonus wages.
Minimum bonus at 8.33% of ₹7,000 × 12 = ₹6,996/year; maximum at 20% = ₹16,800/year (on the ₹7,000 cap).
Bonus is paid on the lower of actual wages and the calculation cap — not full salary for higher earners.
Keep the ₹21,000 eligibility and ₹7,000 cap as parameters on a Settings sheet.

Fact box. Under the Payment of Bonus Act, 1965 (now within the Code on Wages), statutory bonus ranges from a minimum of 8.33% to a maximum of 20% of bonus wages. Employees with Basic + DA up to ₹21,000/month are eligible, but the bonus is computed on wages capped at ₹7,000/month or the state minimum wage, whichever is higher. (Source: Payment of Bonus Act, 1965; Code on Wages.)

How is statutory bonus calculated in Excel?

Bonus is a rate applied to the capped annual wages, not actual salary. Set the calculation cap (₹7,000 or state minimum wage, whichever is higher) in CalcCap, the rate in Rate, and monthly Basic+DA in BasicDA:

Step	Formula
Bonus wages (monthly)	`=MIN(BasicDA,CalcCap)`
Annual bonus wages	`=MIN(BasicDA,CalcCap)*12`
Minimum bonus (8.33%)	`=ROUND(MIN(BasicDA,CalcCap)128.33%,0)`
Maximum bonus (20%)	`=ROUND(MIN(BasicDA,CalcCap)1220%,0)`
Eligible?	`=IF(BasicDA<=21000,"Yes","No")`

If an employee worked fewer than 12 months, multiply by months worked instead of 12, provided they completed at least 30 working days.

Tip: Wrap the whole thing in the eligibility check: =IF(BasicDA<=21000,ROUND(MIN(BasicDA,CalcCap)*MonthsWorked*Rate,0),0). Employees above ₹21,000 Basic+DA get zero statutory bonus (any bonus paid to them is ex-gratia, not Act bonus).

Fact box. On the ₹7,000 calculation cap, the minimum statutory bonus is ₹6,996/year (8.33% × ₹7,000 × 12) and the maximum is ₹16,800/year (20% × ₹7,000 × 12), regardless of how much above ₹7,000 the employee actually earns. (Source: Payment of Bonus Act calculation rules.)

Who is eligible for statutory bonus?

An employee is eligible if their Basic + DA does not exceed ₹21,000 per month and they have worked at least 30 working days in the financial year. Employees earning above the ₹21,000 ceiling are not entitled to statutory bonus, though an employer may pay a discretionary (ex-gratia) bonus.

The calculation cap is separate from eligibility: even an eligible employee earning ₹18,000 has their bonus computed on ₹7,000 (or the state minimum wage if higher), not on the full ₹18,000.

What rate of bonus should I pay?

The Act sets a floor of 8.33% and a ceiling of 20%. The exact rate depends on the employer's allocable surplus (available profit) for the year: a minimum 8.33% is payable even in a loss year, while 20% applies when surplus is sufficient. Most SMBs pay the 8.33% minimum unless profitability supports more.

How to calculate bonus step by step

On a Settings sheet, hold the ₹21,000 eligibility ceiling, the ₹7,000 cap and the applicable state minimum wage.
For each employee, check eligibility (Basic+DA ≤ ₹21,000 and ≥ 30 days worked).
Set the calculation cap = higher of ₹7,000 and state minimum wage.
Compute bonus wages = MIN(BasicDA, CalcCap) × months worked.
Apply the chosen rate (8.33% to 20%).
Total the column and pay within the statutory timeline (generally within 8 months of the financial year-end).

How Ankeshan helps: Ankeshan computes statutory bonus inside Excel — checking the ₹21,000 eligibility, applying the ₹7,000 (or state-minimum-wage) cap and your chosen 8.33%–20% rate — and totals it for payout, with the ceilings kept as parameters. (Launching soon — join the waitlist.)

Frequently asked questions

What is the minimum and maximum statutory bonus? Minimum 8.33% and maximum 20% of bonus wages. On the ₹7,000 calculation cap, that is ₹6,996 to ₹16,800 per year.

Who is eligible for bonus under the Bonus Act? Employees with Basic + DA up to ₹21,000 per month who have worked at least 30 working days in the financial year.

Is bonus calculated on full salary? No. It is calculated on wages capped at ₹7,000 per month or the state minimum wage, whichever is higher — not on actual salary for higher earners.

Is bonus payable in a loss-making year? Yes. The minimum bonus of 8.33% is payable even when the employer has no allocable surplus, subject to the Act's set-on/set-off provisions.

When must bonus be paid? Statutory bonus is generally payable within 8 months of the close of the financial year (so by 30 November for an April–March FY). State rules under the Code on Wages may specify the exact date — check your state notification.

Sources

Payment of Bonus Act, 1965 / Code on Wages — labour.gov.in (eligibility ₹21,000, calculation cap ₹7,000, 8.33%–20% range).
State minimum-wage notifications (calculation cap where higher than ₹7,000).

General information, not professional advice. Verify on the official portal for your case. Reviewed by a Chartered Accountant; last updated 27 June 2026.