IndiaWhat is the minimum bonus an employee is entitled to?
An employee in India is entitled to a minimum bonus of 8.33% of their salary or ₹100 (₹60 for employees under 15), whichever is higher, under the Payment of Bonus Act, 1965.
What the Law Says
The Payment of Bonus Act, 1965 sets the statutory minimum bonus that eligible employees must receive from employers in India.
Every employee who has worked in an establishment for at least 30 working days in an accounting year and whose salary does not exceed ₹21,000 per month is entitled to a bonus. The minimum bonus payable is 8.33% of the employee’s salary (including dearness allowance) for the accounting year — or ₹100, whichever is higher. For employees under the age of 15, the minimum is ₹60 instead of ₹100.
The Act applies to every factory and establishment employing 20 or more persons. It also covers seasonal and part-time workers meeting the eligibility criteria. The bonus is calculated on the basis of salary earned during the accounting year (usually April–March), subject to the statutory ceiling.
The Supreme Court clarified in *Rabobank International v. S. Rajagopal* (2022) that the ₹21,000 monthly salary cap (introduced via amendment in 2015) applies to the gross salary before deductions, and the bonus calculation must be based on actual earnings up to that limit.
Statutory TextEvery employer shall pay to every employee employed by him in the establishment a bonus… which shall be at least 8.33 per cent of the salary or wage earned by the employee during the accounting year… or one hundred rupees, whichever is higher.
— Payment of Bonus Act, 1965, s. 10 — Minimum bonus
Statutory TextIn the case of an employee who has not completed fifteen years of age at the beginning of the accounting year, the minimum bonus payable… shall be sixty rupees.
— Payment of Bonus Act, 1965, s. 10(2) — Minimum bonus for minors
Statutory TextWhere the salary or wage of an employee exceeds twenty-one thousand rupees per month, the bonus shall be computed on twenty-one thousand rupees only.
— Payment of Bonus Act, 1965, s. 12 — Computation of bonus where salary exceeds prescribed limit
What Courts Have Said
Indian courts have interpreted key provisions of the Payment of Bonus Act, 1965 to ensure fair application of minimum bonus entitlements.
Held that the ₹21,000 salary cap under Section 12 applies to gross monthly salary before deductions, and bonus must be calculated on actual earnings up to that ceiling — not on reduced or net amounts.
Confirmed that eligibility under Section 8 depends on actual working days (minimum 30), not just employment status — absence without leave may disqualify if it reduces working days below threshold.
What to Do
Confirm your monthly salary is ≤ ₹21,000 (gross) and you worked ≥30 days in the accounting year.
Calculate 8.33% of your total salary (including DA) for the year — but cap base salary at ₹21,000/month if higher.
Compare result with ₹100 (or ₹60 if under 15); take the higher amount as minimum bonus.
If bonus is unpaid or short-paid, file a claim with the Assistant Labour Commissioner within 1 year under Section 21 of the Act.
Keep payslips, attendance records, and appointment letter as evidence.
Sources
Not legal advice. This article is general information based on publicly available sources, written for educational purposes. Laws change and individual situations vary. Consult a licensed attorney in your jurisdiction before acting on anything you read here. Last reviewed: 2026-06-08.