Gratuity and bonus rules, 2026.
Gratuity is 15 days' wages per completed year of service (more than 6 months rounds up), after 5 years' continuous service (1 year for fixed-term employees), capped at ₹20,00,000. The statutory bonus is 8.33% to 20% of (capped) wages for employees earning up to ₹21,000 a month, after at least 30 days worked in the year.
Last verified 23 October 2026. research/payroll-india-2026.md (Code on Social Security 2020 Ch. V, S.O. 1420(E), S.O. 4710(E)/4711(E)).
| Item | Rule |
|---|---|
| Rate | 15 days' wages per completed year (monthly-rated: last wage × 15/26 × years) |
| Rounding | More than 6 months in the final year rounds up to a full year |
| Eligibility | 5 years' continuous service; 1 year for fixed-term employees |
| Statutory and tax-exempt ceiling | ₹20,00,000 (S.O. 1420(E)) |
| Item | Rule |
|---|---|
| Range | Minimum 8.33%, maximum 20% of (capped) wages |
| Eligibility ceiling | Wages ≤ ₹21,000/month (S.O. 4711(E)) |
| Calculation ceiling | Higher of ₹7,000 or the Central Government's minimum wage (S.O. 4710(E)) |
| Minimum service | 30 days worked in the accounting year |
Worth knowing
- Gratuity nomination is Form III (within 90 days of completing a year); a gratuity claim is Form IV (within 30 days of it becoming payable).
Gratuity and bonus rules, 2026
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Is bonus the same as a Diwali or performance bonus?
No — this is the statutory bonus under the Payment of Bonus provisions, a separate, mandatory minimum. A company's own discretionary bonus is on top of it, not instead of it.
Does Comriq People calculate gratuity automatically?
Comriq People's engine has this exact formula seeded (15 days/26, 6-month rounding, 5-year/1-year eligibility, ₹20,00,000 cap); the statutory bonus is not yet a seeded, automatically-calculated rule in the product — treat the bonus figures above as the published statutory reference until that lands.
See how Comriq People applies this.
Dated rules, read in words on every payslip, with a CA flag where something isn't confirmed yet.