Statutory Bonus Not Paid? How to Claim It in India

If your employer has not paid your statutory annual bonus and you earned up to ₹21,000 a month and worked at least 30 days in the year, you have a legal right to it under the Payment of Bonus Act 1965. You can demand it in writing and, if ignored, apply to the labour department to recover it as if it were an unpaid land revenue debt.

This guide explains who is eligible, how the minimum and maximum bonus is calculated, the deadline by which it must be paid, and the exact steps to recover bonus your employer has withheld. The figures and sections below are taken from the Payment of Bonus Act 1965 as it stands in 2026.

Statutory bonus is a payment your employer is legally required to make every year out of the establishment's profits or allocable surplus. It is not a gift or a festival gesture. Under the Payment of Bonus Act 1965, a covered employer must pay a minimum bonus even in a loss-making year. It is separate from any incentive, ex-gratia, or performance bonus your contract may promise.

Three conditions decide your right to a statutory bonus.

1. Your workplace is covered. Section 1 applies the Act to every factory and to every other establishment employing 20 or more persons on any day during the accounting year. State governments may extend it to establishments with 10 to 19 persons by notification.
2. You are an “employee” under the Act. Section 2(13) defines an employee as a person earning a salary or wage of up to ₹21,000 per month, doing manual, supervisory, managerial, administrative, technical, or clerical work. Apprentices are excluded.
3. You worked at least 30 days. Section 8 says you qualify for bonus in an accounting year only if you worked in the establishment for not less than 30 working days in that year.

If you tick all three, your employer owes you a bonus for that year, profit or no profit.

The Act sets a floor and a ceiling on the amount.

• Minimum bonus. Section 10 requires the employer to pay at least 8.33% of your salary or wage earned in the accounting year, or ₹100, whichever is higher. This minimum is payable whether or not the employer made a profit.
• Maximum bonus. Section 11 caps the bonus at 20% of your salary or wage for the year, when the allocable surplus is large enough to support a higher figure.

There is also a calculation ceiling that often trips people up. Under Section 12, if your salary or wage is more than ₹7,000 per month, or more than the minimum wage fixed for that scheduled employment, whichever is higher, your bonus is worked out as if your wage were that ceiling figure, not your actual higher pay.

Suppose Meena earns ₹18,000 a month at a factory in Pune and the applicable minimum wage for her work is ₹10,000 a month. She is eligible because her pay is under ₹21,000 and she worked the full year.

Her wage is above ₹7,000 and above the ₹10,000 minimum wage, so under Section 12 her bonus is calculated on the higher of the two ceilings, that is ₹10,000 a month, which is ₹1,20,000 for the year. Her minimum bonus at 8.33% works out to about ₹9,996, and her maximum at 20% would be ₹24,000 for the year.

Under Section 19, all bonus payable under the Act must be paid in cash within eight months from the close of the accounting year. For most employers the accounting year ends on 31 March, so the bonus is usually due by 30 November. The appropriate Government can extend this period for sufficient cause, but the total extension cannot exceed two years. If a bonus dispute is pending, payment must follow within a month of the award or settlement becoming enforceable. Once that window passes with no payment, the bonus is overdue and you can act.

1. Put your demand in writing. Send your employer or HR a dated letter or email asking for the unpaid bonus for the specific accounting year. State your monthly wage, your days worked, and the amount due. Keep proof of delivery. A written record matters if the matter goes further.
2. Approach the labour department. If the employer ignores you, you do not have to file a court suit first. Section 21 lets you apply to the appropriate Government (the labour authority for your establishment) for recovery of bonus due under a settlement, award, or under the Act.
3. Mind the one-year limit. Your Section 21 application must be made within one year from the date the bonus became due. The authority can condone a delay if you show sufficient cause, but do not rely on that. Apply promptly.
4. Recovery as land revenue. Once the authority is satisfied that money is due, it issues a recovery certificate to the Collector, who recovers the amount from the employer in the same manner as an arrear of land revenue. This is a powerful route that bypasses a slow civil suit.
5. If the amount is disputed. Section 22 says a dispute between an employer and employees about bonus payable under the Act is deemed to be an industrial dispute under the Industrial Disputes Act 1947. It can then be referred to a labour court or industrial tribunal for a binding decision.

• Assuming a loss year means no bonus. The minimum 8.33% under Section 10 is payable even when the establishment makes no profit.
• Waiting too long. The one-year clock under Section 21 starts when the bonus falls due, not when you first ask. Late applications can be refused.
• Confusing the two wage figures. The ₹21,000 figure under Section 2(13) decides eligibility. The ₹7,000-or-minimum-wage figure under Section 12 decides the amount. They are different tests.
• Treating ex-gratia as statutory bonus. A discretionary festival payment does not cancel your statutory right. Check whether your employer has actually paid the Act bonus.

The bonus provisions of the Payment of Bonus Act 1965 have been folded into the Code on Wages 2020, which brings wages, bonus, and minimum wages under one framework. For now, the Payment of Bonus Act 1965 remains the authoritative reference for the eligibility, calculation, deadline, and recovery rules described above. If you are checking your rights, read this alongside our guide to the new labour codes and employee rights.

Any employee earning up to ₹21,000 per month under Section 2(13), working in a factory or an establishment with 20 or more persons under Section 1, who worked at least 30 days in the accounting year under Section 8, is eligible for statutory bonus.

Under Section 10, the minimum bonus is 8.33% of your annual salary or wage, or ₹100, whichever is higher. This is payable even if the employer made no profit that year. The maximum under Section 11 is 20%.

Section 19 requires bonus to be paid in cash within eight months from the close of the accounting year, so for a year ending 31 March it is usually due by 30 November. The deadline can be extended only by the appropriate Government, up to a total of two years.

First send a written demand. If it is ignored, apply under Section 21 to the labour authority within one year of the bonus falling due. The authority can issue a recovery certificate to the Collector, who recovers the amount like an arrear of land revenue. Disputes over the amount go to a labour court under Section 22.

No. Statutory bonus is a legal right under the Payment of Bonus Act 1965. A festival, incentive, or performance bonus is discretionary and set by your employer. Receiving one does not extinguish your statutory entitlement.

• Employer not paying gratuity: how to claim it
• Recover unpaid minimum wages under the Code on Wages
• New labour codes 2026: your rights on gratuity and wages
• The RTI Playbook

• Payment of Bonus Act 1965, Chief Labour Commissioner, Government of India: https://clc.gov.in/clc/acts-rules/payment-bonus-act-0
• Payment of Bonus Act 1965, India Code, Ministry of Law and Justice: https://www.indiacode.nic.in/handle/123456789/1548