Insights · People & organisation
The bonus ceilings were notified in August, and backdated to November 2025
Two notifications of 25 August settle what your hospital owes for the year that ended in March. The figures are old. The backdating is not, and one of them is being widely misread.
On 25 August 2026 the Ministry of Labour and Employment notified the two bonus ceilings under section 26 of the Code on Wages, 2019. Employees drawing wages of not more than ₹21,000 a month are entitled to statutory bonus. Where an eligible employee's wage exceeds ₹7,000, the bonus is computed as if the wage were ₹7,000 or the minimum wage, whichever is higher. Both are deemed to have come into force from 21 November 2025.
The figures are old. The backdating is the news.
Neither number is a change. ₹21,000 was the eligibility ceiling under the Payment of Bonus Act after its 2015 amendment, and the ₹7,000-or-minimum-wage formula was that Act's section 12. What the notifications do is make those figures operative under the Code, which repealed and replaced that Act.
₹21,000 is who is covered. It is not what you pay on.
The two ceilings do different jobs, and summaries circulating this week have merged them by asserting that the central minimum wage is ₹21,000, so the calculation base is now ₹21,000 too. It is not. Central minimum wages are fixed as daily rates by skill category and area, and none of them reaches ₹21,000 a month. A hospital that computes bonus on ₹21,000 will overpay by a wide margin.
The retrospection is what makes this a live matter rather than a filing. 21 November 2025 is the Code's commencement date. Until 25 August there were no notified ceilings under section 26, which left the bonus position for the accounting year that ended on 31 March 2026 unsettled. It is settled now, and it reaches backwards over a year you have already closed.
The limb that decides your bill is "whichever is higher"
Most hospitals will reach for ₹7,000 because that is the number everyone remembers. For a good part of a hospital's payroll it is the wrong one. General duty assistants, housekeeping staff, ward attendants, security and junior technicians are the roles where the applicable minimum wage for the scheduled employment now sits above ₹7,000 a month. For those employees the base is the minimum wage, and the bonus is correspondingly larger.
At the statutory minimum of 8.33 per cent, the difference between a ₹7,000 base and a ₹12,000 base is about ₹5,000 a year per employee. Across sixty support staff that is ₹3 lakh, on a line most SME hospitals do not budget separately.
What this means for your hospital
Recompute FY2025-26 before you pay anything. For every employee at or under ₹21,000 a month, take the higher of ₹7,000 and the applicable minimum wage for their category, and apply your bonus percentage to that. Minimum 8.33 per cent, maximum 20 per cent.
Fix the cash date, which is 30 November 2026. Bonus is payable within eight months of the close of the accounting year. For a year ended 31 March 2026 that is 30 November. Most hospitals want it out before Diwali regardless, so the working deadline is earlier than the legal one.
Ask your housekeeping and security contractors for their bonus records. Outsourced staff are the contractor's employees, but a principal employer who cannot show that the contractor paid is the one an inspector talks to. Ask now, in writing, for the year just closed.
Do not treat this as the labour codes arriving. It is one central notification under one section. The rules that will actually govern your hospital's hours, leave and registers are state rules, and in most states they remain unmade.
Sources
- S.O. 4710(E), Ministry of Labour and Employment, 25 August 2026 — reproduction of the gazette text on the calculation ceiling, citing section 26 of the Code on Wages, 2019 and deemed commencement from 21 November 2025
- Second reproduction of S.O. 4710(E) — independent copy agreeing on the number, the date and the operative wording, and expressly noting that the notification does not fix a bonus of ₹7,000
- SCC Online, 26 August 2026 — reports two notifications of 25 August 2026 under section 26, the ₹21,000 eligibility ceiling and the ₹7,000-or-minimum-wage calculation ceiling, both retrospective to 21 November 2025
Unverified, stated as such. We have not read the signed gazette PDF: the Ministry of Labour and Employment's own pages return an empty document to us. The calculation notification is reproduced above from two independent copies that agree on S.O. 4710(E), the date and the wording. The companion eligibility notification is reported by SCC Online but we have not confirmed its S.O. number, and we have not seen its text. One point the notification as reproduced does not resolve: it refers to the minimum wage fixed by the Central Government, while most private hospitals fall in the state sphere for minimum wage purposes. Which schedule governs your bonus base is a question for your auditor, and we would not compute a year's liability without putting it to them.
Payroll compliance is cheaper to fix than to defend.
We review hospital payroll against the wage code, the contract labour position and your actual staffing mix, so the liability is known before an inspector arrives at it.
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