How to use this Bonus calculator
A bonus can be a meaningful part of annual earnings, but a percentage on an offer letter only becomes real money once you apply it to the correct salary base. Performance bonuses, statutory bonuses and retention payouts all behave differently.
This calculator turns your bonus percentage and salary base into a clear payout figure, so you can plan around it and understand how it will be taxed when it lands.
Percentage versus payout
The calculator multiplies your salary base by the bonus percentage to show the gross amount. The base could be your annual basic, fixed pay or a defined bonus base depending on your offer.
Always confirm which figure your employer applies the percentage to, because using basic instead of CTC changes the result substantially.
Statutory versus discretionary bonus
Under the Payment of Bonus Act, eligible employees below a wage ceiling receive a statutory bonus between 8.33% and 20% of qualifying wages.
Most white-collar bonuses are discretionary performance or retention payments set by company policy, not by the Act, and can vary year to year.
How a bonus is taxed
A bonus is fully taxable as salary in the year it is received and is subject to TDS, often at a higher apparent rate in that month because it is added to regular pay.
If a large bonus pushes you into a higher slab, planning investments in the same year can help manage the impact under the old regime.