It is festive season, and for many employees one question is on their mind: when is the bonus coming?

For HR and finance teams, statutory bonus is not just a festive gesture. It is a legal obligation with a deadline.

What is the Payment of Bonus Act, 1965?
The Payment of Bonus Act, 1965 required covered establishments to share part of their profits with eligible employees as an annual bonus. Since 21 November 2025, its provisions have been consolidated into the Code on Wages, 2019. The core framework, including the minimum and maximum bonus, carries forward largely intact.

Key rules at a glance
- Coverage: under the Code on Wages, bonus provisions generally apply to establishments employing 20 or more persons
- Eligibility: the employee must have worked at least 30 days in the accounting year
- Wage ceiling: employees earning up to Rs 21,000 per month (basic plus DA) are eligible
- Calculation ceiling: bonus is calculated on Rs 7,000 per month or the applicable minimum wage, whichever is higher
- Minimum bonus: 8.33% of wages or Rs 100, whichever is higher, payable even without profit
- Maximum bonus: 20% of wages, depending on the allocable surplus
- Payment timeline: within eight months of the close of the accounting year

For companies with an April to March accounting year, bonus for FY 2025-26 must generally be paid by 30 November 2026.

A simple example
Say an employee's basic plus DA is Rs 15,000 per month and the applicable minimum wage is Rs 12,000. Bonus is calculated on Rs 12,000.
- Minimum bonus: 12,000 x 12 x 8.33% = about Rs 11,995
- Maximum bonus: 12,000 x 12 x 20% = Rs 28,800
If the employee worked only part of the year, the bonus is proportionate to the days worked.

Disqualification
An employee dismissed for fraud, violent behaviour, theft, misappropriation, or sabotage can be disqualified from receiving bonus.

Practical steps for HR
1. Confirm which employees meet the wage ceiling and the 30-day rule
2. Pull accurate days-worked data from attendance
3. Work out the allocable surplus with finance
4. Pay before the deadline
5. Keep bonus registers updated for inspection

How QkrHR helps
- Attendance-to-payroll sync gives accurate days-worked data, the starting point for eligibility and proportionate bonus
- Unlimited salary structures help separate basic, DA, and other components clearly
- The statutory register pack and three-stage payroll lock support accurate, audit-ready payroll
- Statutory compliance is included in every QkrHR plan

The bottom line
Statutory bonus is a right, not a favour. With the deadline approaching, now is the time to check eligibility, calculations, and records.

Ceilings can be revised by notification, so confirm the latest figures with your compliance advisor.

Read the full explanation: https://www.qkrbiz.com/hrms-software/hr-glossary/payment-of-bonus-act-1965
Book a free demo: https://www.qkrbiz.com/signup

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