Bonus Calculator
Calculate your bonus amount, percentage, and net bonus after taxes
Bonus Calculation Results
Understanding Bonus Calculation
What is Bonus?
A bonus is an additional payment given to employees over and above their regular salary. It can be based on various factors such as:
- Festival Bonus: Given during festivals like Diwali, Christmas
- Performance Bonus: Based on individual or company performance
- Annual Bonus: Year-end bonus for all employees
- Retention Bonus: To retain key employees
How Bonus is Calculated?
The basic formula for bonus calculation is:
Example: If basic salary is ₹50,000 and bonus percentage is 20%:
Gross Bonus = ₹50,000 × (20/100) = ₹10,000
Tax on Bonus in India
In India, bonuses are taxable under the following conditions:
- Up to ₹3,500: Tax-free under Section 10(14)
- Above ₹3,500: Taxed as per income tax slab rates
- TDS: Employer deducts TDS if bonus exceeds ₹50,000 in a year
- Tax Rate: Typically 30% for most salaried individuals
Bonus Eligibility Criteria
As per Payment of Bonus Act, 1965:
- Applies to establishments with 20+ employees
- Minimum bonus: 8.33% of salary
- Maximum bonus: 20% of salary
- Employee must have worked for at least 30 days
- Maximum salary limit: ₹21,000 per month
Types of Bonuses
Quick Bonus Reference Table
| Basic Salary | 10% Bonus | 20% Bonus | 30% Bonus | Net (After 30% Tax) |
|---|---|---|---|---|
| ₹ 25,000 | ₹ 2,500 | ₹ 5,000 | ₹ 7,500 | ₹ 5,250 |
| ₹ 50,000 | ₹ 5,000 | ₹ 10,000 | ₹ 15,000 | ₹ 10,500 |
| ₹ 1,00,000 | ₹ 10,000 | ₹ 20,000 | ₹ 30,000 | ₹ 21,000 |
Tips for Maximizing Your Bonus
- Understand your company's bonus structure and criteria
- Set clear performance goals at the beginning of the year
- Document your achievements and contributions
- Understand the tax implications and plan accordingly
- Consider investing your bonus for long-term growth
Frequently Asked Questions
A: Yes, bonuses are taxable as income. The first ₹3,500 is tax-free under Section 10(14), and amounts above this are taxed as per your income tax slab.
A: As per the Payment of Bonus Act, the minimum bonus is 8.33% of the salary or ₹100, whichever is higher.
A: Festival bonuses are paid during major festivals (Diwali, Christmas). Annual bonuses are typically paid at the end of the financial year or during appraisal cycles.