Find a bonus amount as a percentage of your yearly basic salary.
A percentage of annual basic salary.
Bonus: Annual basic × bonus %
The bonus calculator finds a bonus amount as a percentage of annual basic salary. You enter the yearly basic and the bonus percentage, and it multiplies the two. The default of 8.33% matches the statutory minimum bonus under the Payment of Bonus Act, which many Indian establishments pay around Diwali or at the close of the accounting year.
Covered employees are entitled to at least this minimum each year, and employers with allocable surplus often pay more, up to the ceiling that the Act sets. Separately, many private companies pay a performance bonus or annual incentive written as a percentage of basic or of fixed pay. In both cases the question is the same: what percentage of which salary base, and what does it come to in rupees.
1. Find the salary base your employer uses. Under the Payment of Bonus Act it is basic plus DA for the accounting year, subject to the wage ceiling the Act applies.
2. Add up that base for the full year, or for the months you actually worked if you joined midway.
3. Write the bonus rate as a percentage, for example 8.33% for the statutory minimum.
4. Bonus = Annual base × Bonus% ÷ 100.
5. If tax is relevant, remember the bonus is added to your salary income for the year and taxed at your slab rate.
8.33% is one-twelfth of 100%. A bonus of 8.33% of annual wages equals exactly one month's wages, because 12 months × 8.33% ≈ 100%. That is the idea behind the statutory minimum: roughly a thirteenth month of pay. It also explains why employers often describe the Diwali bonus as 'one month's salary'. The link holds only if the base is the same as the monthly wage used in the comparison, so check whether your company uses basic, basic plus DA, or gross.
A statutory bonus is a legal entitlement for covered employees in covered establishments. It is calculated on a defined wage base, within a minimum and maximum percentage, and it depends on the establishment's allocable surplus beyond the minimum. A performance bonus is a contractual or discretionary payment linked to targets, ratings or company results. It is usually a percentage of fixed pay or CTC and may be zero in a bad year. This calculator does the arithmetic for either, as long as you enter the right base and rate.
If you worked only part of the year, the bonus is normally proportionate to the wages you earned in that period, not the full annual base. Under the Act there is also a minimum number of working days in the year before an employee becomes eligible, and higher-paid employees above the Act's salary limit fall outside it entirely. In those cases the company's own bonus policy decides. Check your appointment letter or HR policy for the base, eligibility and payout month.
Imran works at a textile unit in Surat. His basic salary for the accounting year adds up to ₹3,60,000 and the company has declared a 12% bonus.
Answer: Bonus amount ₹43,200
Applying the bonus percentage to CTC when the policy says basic or basic plus DA.
Expecting the full-year bonus after joining in the middle of the year.
Assuming the bonus is tax-free; it is taxed as salary in the year it is paid.
Confusing a performance bonus that depends on ratings with the statutory minimum that is an entitlement.
Estimating the Diwali or year-end bonus before it is announced.
Payroll teams computing statutory bonus for each covered employee.
Checking whether a declared bonus percentage meets the statutory minimum.
Planning advance tax or TDS impact of a large one-time payout.
What is the statutory minimum bonus in India?
8.33% of yearly basic salary (or wages), for employees covered under the Payment of Bonus Act. Many employers choose to pay a higher bonus than this.