On 25 August 2026, the Ministry of Labour and Employment issued two notifications under the Code on Wages, 2019 clarifying who is eligible to receive statutory bonus and how the bonus amount is to be calculated.
While the one notification specifies that employees earning up to ₹21,000 per month will be eligible for bonus, the other lays down the method for calculating bonus for eligible employees whose monthly wages exceed ₹7,000.
Key Highlights
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The Central Government has issued two notifications under Section 26 of the Code on Wages, 2019 specifying who is eligible for statutory bonus and how such bonus is to be calculated.
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Employees drawing wages not more than ₹21,000 per month will be eligible for bonus under Section 26(1) of the Code on Wages, 2019.
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For eligible employees earning more than ₹7,000 per month, bonus will not be calculated on their actual salary.
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The bonus will be calculated on ₹7,000 per month or the Central Government’s minimum wage, whichever is higher.
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In simpler words, employees earning between ₹7,000 and ₹21,000 per month may receive bonus, but the calculation will be based on the prescribed wage ceiling rather than their full salary.
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Both notifications are deemed to have come into force retrospectively from 21 November 2025.
[Ministry of Labour and Employment Bonus Eligibility Notification, dated 25-08-2026]
[Ministry of Labour and Employment Bonus Calculation Notification, dated 25-08-2026]
