India labor codes mandate statutory bonuses for employees earning up to ₹21,000

The Ministry of Labour and Employment has issued notifications regarding bonus eligibility under the Code on Wages, 2019. Employees earning a monthly salary of up to ₹21,000 are legally entitled to a statutory bonus, provided they have worked a minimum of 30 days during the accounting year. This 30-day requirement does not need to be consecutive.

For employees earning more than ₹21,000 per month, employers are not legally obligated to provide a statutory bonus, though they may offer incentives based on company policy.

The bonus amount is calculated as a percentage of either ₹7,000 or the applicable minimum wage, whichever is higher. The annual bonus must range between a minimum of 8.33% and a maximum of 20% of this base amount. According to Section 39(1) of the Code on Wages, 2019, all bonus payments must be deposited into the employee's bank account within eight months of the end of the accounting year.