Central Government Revises Bonus Calculation Ceiling to Rs 7,000 per Month

The Ministry of Labour and Employment has issued a notification exercising powers under sub-section (2) of section 26 of the Code on Wages, 2019 (29 of 2019), revising the wage ceiling for bonus calculation purposes. The notification determines that for employees eligible for bonus under sub-section (1) of section 26 whose wages exceed seven thousand rupees per month, the bonus payable shall be calculated as if their wage was seven thousand rupees per month or the minimum wage fixed by the Central Government, whichever is higher. This replaces any previous ceiling amount that may have been in effect for bonus calculations under the Code on Wages, 2019. The notification has been made effective retrospectively from 21st November, 2025. This determination impacts the computation methodology for statutory bonus payments across establishments covered under the Code on Wages, 2019. Employers must now use the revised ceiling of Rs 7,000 per month (or applicable minimum wage if higher) as the basis for calculating bonus entitlements for all eligible employees, regardless of their actual wages. The notification was published in the Gazette of India Extraordinary on 25th August, 2026, under notification number S.O. 4710(E) and carries file reference S-33027/5/2026-WB.