Bonus declared but unpaid: how to recover it

Reviewed on: 2026-06-12.

Your employer announced a bonus, perhaps even showed it in a letter or the salary annexure, and the money never came. Do these four things first.

1. Save the proof of declaration: the email, HR circular, appraisal letter, settlement, wage slip line, or union agreement that mentions the bonus and its amount or formula.
2. Check which kind of bonus it is. Statutory bonus under the Payment of Bonus Act, 1965 has a fixed legal route. A discretionary incentive or ex gratia payment runs on your contract.
3. Note the deadline. Statutory bonus is payable within 8 months of the close of the accounting year (Section 19). For most companies with an April to March year, that means by 30 November.
4. Write to HR and the employer in one short email asking for the payment date in writing. Every later forum will ask what the employer said when you asked.

The Payment of Bonus Act, 1965 applies to factories and to establishments with 20 or more employees. You are covered if your salary or wage (basic plus dearness allowance) is up to Rs 21,000 per month and you worked at least 30 working days in the accounting year. Within this scheme, bonus is not a gift. The Act fixes a minimum of 8.33 percent and a maximum of 20 percent of annual salary, calculated on Rs 7,000 per month or the minimum wage for your job, whichever is higher (Sections 10 to 12). An employer who declared it and skipped paying it is sitting on a statutory debt.

A “performance bonus”, sales incentive, retention bonus or Diwali ex gratia above these limits is different. That is a contractual promise. The remedy is a demand letter, then a labour or civil claim depending on your role, not the Bonus Act machinery. Many employees lose months by filing under the wrong head, so settle this question first. If your offer letter calls the amount “variable pay subject to discretion”, expect the employer to argue discretion, and gather every written communication that made the payment look committed.

Government departments are outside the Bonus Act; their employees get productivity-linked or ad hoc bonus under specific government orders, and disputes there run through service channels.

Meena earns Rs 16,000 per month (basic plus DA) in a Pune company of 80 employees. The minimum wage for her schedule is Rs 9,200. Her statutory bonus base is Rs 9,200, since it is higher than Rs 7,000. At the declared 8.33 percent for a full year, her bonus is roughly Rs 9,200 x 12 x 8.33 percent, about Rs 9,196. The company declared bonus in its September board note but did not pay by 30 November. From 1 December, Meena can complain to the labour department without waiting any longer.

For unpaid statutory bonus, the working remedy is an application to the appropriate government, in practice the office of the labour commissioner (state labour department for most private establishments, the Central labour machinery for banks, mines, major ports and central undertakings).

1. Send the employer a written demand giving 15 days, referencing Section 19 of the Act and the declaration document.
2. If unpaid, file a claim or complaint with the area labour officer or assistant labour commissioner. Attach the declaration proof, wage slips, and your demand letter. Many states accept these grievances through their online labour portals; the Central sphere uses CPGRAMS at pgportal.gov.in as a pressure channel alongside.
3. The authority calls the employer for conciliation. Most declared-but-unpaid cases settle here, because the employer has no defence on liability.
4. If the employer still does not pay, Section 21 lets the government issue a recovery certificate, and the amount is recovered as arrears of land revenue. Disputes about entitlement itself can be referred as an industrial dispute under Section 22.

The limitation trap: a Section 21 recovery application must normally be made within one year of the bonus becoming due. The authority can condone delay for sufficient cause, but do not rely on that. If your bonus became due last November, the safe window is already running.

To: [Managing Director / HR Head, company name and address]

Subject: Payment of declared bonus for accounting year [year], due under
Section 19, Payment of Bonus Act, 1965

Sir/Madam,

1. By [circular/email/letter dated], the company declared bonus of
   [percentage or amount] for the accounting year [year]. I was on the
   rolls throughout and my wages are within the limit under Section 2(13).

2. Under Section 19 of the Payment of Bonus Act, 1965, the bonus was
   payable within eight months of the close of the accounting year,
   that is by [date]. It remains unpaid.

3. Please credit the bonus of Rs [amount] within 15 days. Failing this,
   I will file a recovery application before the labour authorities
   under Section 21 of the Act, without further notice.

Name, employee ID, designation, dates of service, signature, date.

The employer, if private, is not under RTI. The labour department is. After filing your claim, you can use RTI with the state labour department or the office of the labour commissioner to ask: the status and file movement of your complaint, copies of the employer's reply, inspection reports for the establishment under the Bonus Act, and whether the employer filed its annual bonus return. This stops the file from sleeping. If your employer is a public sector undertaking, RTI also reaches the PSU itself for the bonus sanction note. Start with how to file RTI online and use the state RTI portal directory to find your state route.

• Placement offer withdrawn after acceptance
• Absconding letter despite proper resignation
• Background check stuck at a previous employer
• Salary account conversion errors

All employment fixes are indexed at all practical guides.

Yes, for the accounting year you worked. Statutory bonus is earned for the year of work, not for being on the rolls on the payment date. Claim it like any other unpaid due, and mention it in your full and final settlement correspondence.

No. The Act covers employees with wages up to Rs 21,000 per month. Above that, a declared bonus is a contractual claim. Send a demand letter and consider a civil or labour claim depending on your role.

The minimum 8.33 percent bonus is payable even in a loss year for covered employees. Once a bonus is declared, withdrawing it is very hard to defend. Put the company's reason in writing and take it to the labour officer.

Section 18 allows deduction of customary or interim bonus already paid, and certain proven misconduct losses. General salary advances or notice recovery cannot quietly swallow the bonus. Ask for the calculation sheet.

No court fee for the complaint, and you can appear yourself at the conciliation stage. A lawyer becomes useful if the matter is referred as an industrial dispute.

That is contractual, not statutory. The route is a demand letter and then a money claim. Keep the offer letter, the relieving terms and every email about the promise.

Download the unpaid bonus recovery checklist (PDF).