๐๐ข๐ก๐จ๐ฆ ๐๐๐ช ๐๐จ๐ฆ๐ง ๐๐ข๐ง ๐๐ง๐ฆ ๐ ๐๐ฆ๐ฆ๐๐ก๐ ๐ก๐จ๐ ๐๐๐ฅ๐ฆ โ ๐๐ก๐ โน๐ณ,๐ฌ๐ฌ๐ฌ ๐๐ฆ ๐ก๐ข๐ง ๐ง๐๐ ๐๐๐๐๐๐๐๐๐๐ง๐ฌ ๐๐๐๐๐๐ก๐.
On 25 August 2026, the Ministry of Labour & Employment issued two crucial Gazette notifications under ๐ฆ๐ฒ๐ฐ๐๐ถ๐ผ๐ป ๐ฎ๐ฒ of the Code on Wages, 2019.
For establishments where the ๐๐ฒ๐ป๐๐ฟ๐ฎ๐น ๐๐ผ๐๐ฒ๐ฟ๐ป๐บ๐ฒ๐ป๐ is the โappropriate Governmentโ, the position is now clear:
โถ ๐ช๐๐ข ๐๐ฆ ๐๐๐๐๐๐๐๐?
โค S.O. 4711(E) fixes the monthly wage eligibility ceiling at ๐ฅ๐. ๐ฎ๐ญ,๐ฌ๐ฌ๐ฌ.
โ An employee drawing wages not exceeding โน21,000 per month can fall within statutory bonus eligibility, subject to Section 26 and other applicable provisions.
โท ๐ข๐ก ๐ช๐๐๐ง ๐ช๐๐๐ ๐๐ฆ ๐๐ข๐ก๐จ๐ฆ ๐๐๐๐๐จ๐๐๐ง๐๐?
โค S.O. 4710(E) says that where an eligible employeeโs wage exceeds โน7,000 per month, bonus is calculated as if the wage were:
๐ฅ๐. ๐ณ,๐ฌ๐ฌ๐ฌ ๐ข๐ฅ ๐๐ต๐ฒ ๐บ๐ถ๐ป๐ถ๐บ๐๐บ ๐๐ฎ๐ด๐ฒ ๐ณ๐ถ๐ ๐ฒ๐ฑ ๐ฏ๐ ๐๐ต๐ฒ ๐๐ฒ๐ป๐๐ฟ๐ฎ๐น ๐๐ผ๐๐ฒ๐ฟ๐ป๐บ๐ฒ๐ป๐ โ ๐๐ต๐ถ๐ฐ๐ต๐ฒ๐๐ฒ๐ฟ ๐ถ๐ ๐ต๐ถ๐ด๐ต๐ฒ๐ฟ.
โฆ ๐ง๐๐๐ฆ ๐๐ฆ ๐ง๐๐ ๐๐๐ฌ ๐๐๐๐๐๐ฅ๐๐ก๐๐
โน21,000 = ๐ฒ๐น๐ถ๐ด๐ถ๐ฏ๐ถ๐น๐ถ๐๐ ceiling.
โน7,000/minimum wage = ๐ฐ๐ฎ๐น๐ฐ๐๐น๐ฎ๐๐ถ๐ผ๐ป base.
Example:
If wages = โน18,000 and the applicable Central minimum wage is โน12,000, the statutory bonus base is โน12,000 โ not โน7,000 and not โน18,000.
โฆ ๐ข๐ก๐ ๐ ๐ข๐ฅ๐ ๐ฃ๐๐ฌ๐ฅ๐ข๐๐ ๐ฃ๐ข๐๐ก๐ง
Do not test โน21,000 against โCTCโ, gross salary or Basic alone. Section 26 uses ๐ช๐๐๐๐ฆ under Section 2(y) โ including the 50% deeming/add-back rule where specified exclusions cross the statutory limit.
โผ ๐ ๐๐ก๐๐ ๐จ๐ ๐๐ก๐ ๐ ๐๐ซ๐๐ ๐จ๐
Section 26 provides for minimum annual bonus of ๐ดโ % and, where allocable surplus permits, bonus up to ๐ฎ๐ฌ%.
โผ ๐ฅ๐๐ง๐ฅ๐ข๐ฆ๐ฃ๐๐๐ง๐๐ฉ๐ ๐๐๐๐๐๐ง
Both notifications are deemed effective from ๐ฎ๐ญ ๐ก๐ผ๐๐ฒ๐บ๐ฏ๐ฒ๐ฟ ๐ฎ๐ฌ๐ฎ๐ฑ โ the date on which the bonus chapter of the Code became operational.
โผ Under Section 39, statutory bonus is ordinarily to be credited to the employeeโs bank account within 8 months from the close of the accounting year, subject to the Codeโs extension/dispute provisions.
โ ๏ธ ๐ง๐๐ ๐๐ข๐ ๐ฃ๐๐๐๐ก๐๐ ๐ง๐ฅ๐๐ฃ
Do not treat these Central Government figures as an automatic all-India rule for every establishment.
Under Section 2(d), the Central Government is the appropriate Government for specified sectors such as railways, mines, oil fields, major ports, air transport, telecom, banking, insurance, CPSUs etc.; for other establishments, the ๐ฆ๐๐ฎ๐๐ฒ ๐๐ผ๐๐ฒ๐ฟ๐ป๐บ๐ฒ๐ป๐ is the appropriate Government.
So HR/Payroll must check:
โ Who is the appropriate Government?
โ What eligibility ceiling has it notified?
โ What calculation ceiling/minimum wage applies?
โ Is the employee covered by Chapter IV and has the 30-day work condition been met?
