Code on Wages: bonus for employees drawing up to ₹21,000 a month, to be calculated on ₹7,000 or the Central minimum wage — S.O. 4711(E) and S.O. 4710(E)
Two Labour Ministry notifications dated 25 August 2026 under section 26 of the Code on Wages, 2019 fix the bonus numbers: every employee drawing wages not exceeding ₹21,000 a month is to be paid bonus, and where the wage is above ₹7,000 a month the bonus is calculated as if the wage were ₹7,000 or the minimum wage fixed by the Central Government, whichever is higher. Both are deemed to have come into force on 21 November 2025.
Key facts
- In force
- Deemed to have come into force on 21 November 2025
- Who it affects
- Employers and establishments paying bonus under the Code on Wages, 2019; employees drawing wages up to ₹21,000 a month; payroll and HR teams
- Source
- Ministry of Labour & Employment Notifications S.O. 4711(E) and S.O. 4710(E) dated 25 August 2026 ↗
- What it is
- Rule change
- Section
- Labour
- Published
- 25 August 2026
In 30 seconds
- S.O. 4711(E), under section 26(1): every employee drawing wages not exceeding ₹21,000 a month shall be paid bonus as specified in that sub-section.
- S.O. 4710(E), under section 26(2): where an eligible employee’s wage exceeds ₹7,000 a month, bonus is calculated as if the wage were ₹7,000 a month or the minimum wage fixed by the Central Government, whichever is higher.
- The calculation rule applies to bonus payable under sub-sections (1) and (3) of section 26.
- Both notifications are dated 25 August 2026 and were published in the Gazette of India, Extraordinary, the same day.
- Each says it “shall be deemed to have come into force on the 21st day of November, 2025”.
हिंदी में सार
श्रम और रोज़गार मंत्रालय ने 25 अगस्त 2026 को मज़दूरी संहिता, 2019 की धारा 26 के तहत दो अधिसूचनाएँ जारी की हैं। S.O. 4711(E) के अनुसार ₹21,000 प्रति माह तक मज़दूरी पाने वाले हर कर्मचारी को बोनस मिलेगा; S.O. 4710(E) के अनुसार ₹7,000 से ज़्यादा मज़दूरी होने पर बोनस की गणना ₹7,000 या केंद्र सरकार द्वारा तय न्यूनतम मज़दूरी, जो भी अधिक हो, पर होगी। दोनों अधिसूचनाएँ 21 नवंबर 2025 से प्रवृत्त मानी जाएँगी।
What has been notified
The Ministry of Labour and Employment has issued two notifications dated 25 August 2026, both under section 26 of the Code on Wages, 2019 (29 of 2019). One settles which employees are to be paid bonus under the Code. The other settles the wage on which that bonus is worked out.
| Notification | Power used | What the Central Government has determined |
|---|---|---|
| S.O. 4711(E) | Section 26(1) | Every employee drawing wages not exceeding ₹21,000 a month shall be paid bonus as specified in that sub-section |
| S.O. 4710(E) | Section 26(2) | For calculating bonus payable under sub-sections (1) and (3) of section 26: where the wage of an employee eligible for bonus exceeds ₹7,000 a month, the bonus is calculated as if the wage were ₹7,000 a month or the minimum wage fixed by the Central Government, whichever is higher |
The date from which they apply
Both notifications carry the same second paragraph: “This notification shall be deemed to have come into force on the 21st day of November, 2025.” They were published in the Gazette of India, Extraordinary, on 25 August 2026. The two limits therefore operate from a date earlier than the notifications themselves.
How the two fit together
- Who gets bonus: the test is the wage drawn — up to ₹21,000 a month.
- On what amount: for an eligible employee whose wage is above ₹7,000 a month, the calculation does not use the actual wage. It uses ₹7,000 a month, or the minimum wage fixed by the Central Government if that is higher.
- The calculation notification speaks only of employees whose wage exceeds ₹7,000 a month.
What the notifications do not say
Neither notification states the rate of bonus, the minimum wage figure, or how past periods are to be reconciled. The bonus itself is “as specified” in section 26(1) of the Code, and the minimum wage is whatever the Central Government has fixed.
What employers should do
Identify the employees whose monthly wage is ₹21,000 or less. For each of them drawing more than ₹7,000 a month, compare ₹7,000 with the minimum wage fixed by the Central Government and use the higher figure as the wage for the bonus calculation. Because both notifications are deemed to be in force from 21 November 2025, bonus worked out under the Code for the period from that date should be checked against these two figures.
Questions and answers
Which employees are to be paid bonus under the Code on Wages?
S.O. 4711(E) dated 25 August 2026 determines that every employee drawing wages not exceeding ₹21,000 a month shall be paid bonus as specified in section 26(1) of the Code on Wages, 2019.
On what wage is the bonus calculated?
Under S.O. 4710(E), where the wage of an eligible employee exceeds ₹7,000 a month, the bonus is calculated as if the wage were ₹7,000 a month or the minimum wage fixed by the Central Government, whichever is higher.
From what date do these limits apply?
Each notification states that it shall be deemed to have come into force on the 21st day of November, 2025, although both are dated 25 August 2026.
Do the notifications give the rate of bonus?
No. They fix only the wage limit for eligibility and the wage to be used for calculation. The bonus is “as specified” in section 26(1) of the Code.
Published 25 August 2026. Updated 6 October 2026. This report is for general information and is not professional advice. Read the source document before acting on it.