Short Tenure, Full Rights: The 4-Month Bonus Rule in India

In the modern Indian workplace, project-based hiring and Fixed-Term Employment (FTE) have become the norm. But a common question persists among both employers and employees: “If I only worked for four months, do I still get a bonus?”

There is a widespread myth that a "bonus" is a year-end gift reserved for those who have completed 12 months of service. However, under Indian law, the bonus isn't a gift—it’s a statutory right that kicks in much earlier than you might think.

The 30-Day "Golden Rule"

The most critical piece of information for any short-term employee is the 30-day threshold.

Under the Payment of Bonus Act, 1965 and the consolidated Code on Wages, 2019 (which is the active framework in 2026), an employee is entitled to a bonus if they have worked for at least 30 working days in an accounting year.

Since four months (approx. 120 days) far exceeds this limit, a fixed-term employee is legally eligible for a bonus, provided their salary falls within the statutory limits (currently up to ₹21,000 per month).

Fixed-Term Parity: FTE vs. Permanent

One of the landmark changes in the 2026 Labour Code implementation is the absolute parity given to Fixed-Term Employees. The law explicitly states that an FTE must receive the same wages, allowances, and statutory benefits as a permanent employee.

How is it calculated for 4 months?

The bonus is calculated on a pro-rata basis. This means you receive a portion of the annual bonus equivalent to the time you served.

• Minimum Bonus: 8.33% of the wages earned during those 4 months.
• Maximum Bonus: Up to 20%, depending on the company's "allocable surplus."

Relatable Example: The Festive Project Hire

Imagine Anjali, a graphic designer hired for a 4-month project during the festive season (September to December). Even though her contract ends in December, the company is legally bound to pay her a bonus for those 4 months. While the payment usually happens during the company's standard bonus cycle (within 8 months of the end of the financial year), Anjali’s right to that amount is secured the moment she crosses her 30th working day.

Can an Employer Refuse the Bonus?

A bonus can only be denied in very specific cases of misconduct, such as:

1. Fraud
2. Riotous or violent behaviour on premises.
3. Theft or sabotage of company property.
4. Sexual Harassment (confirmed after due process).

Outside of these "disqualifications," the duration of employment (as long as it's over 30 days) cannot be used as a reason to withhold payment.

 

Disclaimer

This content is provided for educational purposes only and does not constitute formal legal advice. While the information is based on the Payment of Bonus Act, 1965 and the Code on Wages, 2019 as of January 2026, specific applications may vary based on company surplus and state-specific notifications. The publisher is not liable for any legal consequences arising from the use of this guide. Please consult a registered Labour Law Consultant for specific compliance queries.