What is Statutory Bonus?
Statutory bonus is the annual bonus an Indian employer must pay under law to eligible employees, apart from any performance bonus. Section 26 of the Code on Wages, 2019 covers employees earning up to a salary limit the government notifies who worked at least 30 days in the year. The minimum is 8.33% and the maximum 20% of wages.
Example
An eligible employee earning below the notified limit and working a full year receives at least 8.33% of wages earned as bonus. Company-paid performance or festival bonuses are separate and follow your terms.
Related
See Code on Wages and variable pay.
Related terms and guides
Sources
- The Code on Wages, 2019, https://www.labour.gov.in/static/uploads/2025/06/c328da14bbb15fc4ad571dc33e7a4ab3.pdf, live official page, linked for readers; link checked 2026-10-31
- Ministry of Labour and Employment, Compliance Handbook for Employers under the Four Labour Codes, https://www.labour.gov.in/static/uploads/2026/02/83978455025732b99b0165def80ab171.pdf, live official page, linked for readers; link checked 2026-10-31
This is general information, not legal, tax or immigration advice. Rules change and your situation may differ. Consult a licensed attorney or qualified adviser.