Am I eligible for statutory bonus and how is it calculated?

Question

My company has not paid me any bonus this year and I want to know whether I am legally entitled to one and how much. I have been reading conflicting things online and I would like to understand what Indian law actually says about this, which Act and Section applies, what the realistic timelines and costs are, and what I should be doing right now to protect my position. If the matter can be resolved without litigation I would prefer that route, but I want to know what my rights are before I agree to anything or sign any document.

MyVakeel Legal Desk · Accepted Answer

Am I eligible for statutory bonus and how is it calculated? is governed in India primarily by Payment of Bonus Act 1965, Section 8, Payment of Bonus Act 1965, Section 10 and Payment of Bonus Act 1965, Section 12. The short answer is set out below, followed by the practical steps most people in this situation need to take. Read it alongside the specific provisions named, because the exact relief available to you turns on the facts you can prove on paper.

Section 8 of the Payment of Bonus Act 1965 makes every employee drawing wages up to the notified ceiling eligible for bonus provided they have worked for at least 30 working days in the accounting year.

Section 10 mandates a minimum bonus of 8.33% of salary or wages earned during the accounting year, or 100 rupees whichever is higher, payable irrespective of whether the employer has made any profit in that year.

Section 12 caps the salary considered for bonus calculation at a notified amount even if the employee's actual salary is higher, so bonus is computed on the lower of actual salary or the statutory ceiling.

The maximum bonus payable can go up to 20% of wages depending on the allocable surplus calculated as per the Act's schedules, and employers must disburse bonus within 8 months from the close of the accounting year.

An employee who is dismissed for fraud, riotous behaviour or theft during the accounting year can be disqualified from bonus under Section 9, but this disqualification must be based on an established misconduct, not a mere allegation.

What to do next: 1) Check whether your monthly salary falls within the wage ceiling notified under the Act; 2) Verify the number of working days you completed in the relevant accounting year; 3) Request a written computation of bonus payable from your employer's accounts or HR team; 4) File a claim before the labour authority if the minimum bonus is denied or delayed beyond 8 months.

If the other side has already issued a notice, filed a case or set a deadline, treat the matter as time-sensitive — most remedies under Payment of Bonus Act 1965, Section 8 carry limitation periods, and a delay you cannot explain weakens an otherwise strong case. You can post the details on the MyVakeel forum for a practising advocate to review, or book a paid consultation with a Bar Council verified lawyer in this practice area.