The Ministry of Labour and Employment (MoLE), on August 25, 2026, determined the wage ceiling to be applied for calculating bonus under Section 26(1) and (3) of the Code on Wages, 2019. Where the wage of an employee eligible for bonus exceeds ₹7,000 per month, the bonus shall be calculated as if the employee’s wage were ₹7,000 per month or the minimum wage fixed by the Central Government, whichever is higher.
The notification provides that this determination applies for the purpose of calculation of bonus payable under Section 26 of the Code on Wages, 2019. Accordingly, the relevant calculation base is not necessarily capped at ₹7,000; where the applicable Central Government minimum wage is higher than ₹7,000, the higher minimum wage will be used.
The notification has retrospective effect from November 21, 2025, meaning that it is deemed to have come into force from that date.
[Notification No. S.O. 4710(E)]
