Diwali advances went out in late October. Finance assumes “bonus is done.” On 28 November an auditor asks for the statutory bonus working - wage base, eligibility days, percentage and payout proof. The advance was a festival gesture. The statutory clock is still ticking toward 30 November.
The eight-month rule, in plain language
Where statutory bonus is payable, it is ordinarily due within eight months of the close of the accounting year. For companies whose year ends on 31 March, that lands on 30 November. If your year ends on another date, move the deadline with the calendar - do not copy a peer company’s November habit blindly.
The Payment of Bonus framework (now read with the Code on Wages) still drives eligibility thresholds, the typical 8.33% floor, and the higher band tied to allocable surplus. Confirm whether your establishment is covered and whether any exemption applies before you tell the board “N/A.”
Wage definition is the silent multiplier
Bonus is computed on wages. After the Labour Codes, that means the Code definition - not a casual “basic for bonus” column that ignored the 50% add-back. A salary structure rebuilt for PF can still be wrong for bonus if components were never tagged for the bonus run.
Diwali advance vs statutory bonus
| Item | Festival advance / gift | Statutory bonus |
|---|---|---|
| Legal duty | Policy / goodwill | Statute where applicable |
| Timing | Whenever leadership chooses | Within 8 months of year close |
| Proof | Bank narration “Diwali” | Wage base × % × eligible headcount |
Employees remember the festival transfer. Inspectors remember the statutory working. Run both - and label both - or you will explain the same rupees twice.
The way forward
Freeze eligible headcount, recompute Code wages, decide the percentage with finance, and post a dedicated bonus payroll component before 30 November. Put the run on native payroll so the register survives the next audit. Slot it into the November 2026 calendar.
Practical operations guidance, not legal advice. Confirm coverage, ceilings and accounting-year timing with a qualified advisor.
Need a clean November bonus run?
Compute, approve and bank-file statutory bonus on the same wage engine as PF.
