How Much Diwali Bonus Should Restaurants Give Staff in India?

Industry standards for Diwali bonus

Diwali bonus is culturally expected in Indian restaurants — not legally mandatory for establishments under 20 employees, but essential for retention.

Standard: 15–30 days' basic salary depending on role and tenure.

• Head chef: 1 month salary (₹25,000–45,000)
• Line cook/helper: 15–20 days (₹6,000–12,000)
• Server/captain: 15–20 days (₹5,000–10,000)
• Delivery rider (if employed): 7–15 days (₹3,000–6,000)
• New staff (<6 months): pro-rata or token gift

Calculating your Diwali bonus budget

Formula: total monthly payroll × 1 to 1.5 = Diwali bonus pool. For a restaurant with ₹2.5 lakh/month payroll, budget ₹2.5–3.75 lakh for Diwali bonuses.

Start saving 2 months before: set aside 10% of weekly payroll from September onward.

• Step 1: List all staff with basic salary
• Step 2: Assign bonus days by role (15–30 days)
• Step 3: Calculate total bonus pool
• Step 4: Save 10% of weekly payroll from September
• Step 5: Pay 3–5 days before Diwali

Non-cash alternatives when budget is tight

If cash bonus is not feasible, meaningful non-cash gestures maintain morale: new uniforms, quality gifts, team dinner, or extra paid day off.

Never skip Diwali recognition entirely — staff remember and leave.

• New uniforms/aprons for all staff (₹500–1,000/person)
• Quality gift hampers (₹500–1,500/person)
• Team dinner at your restaurant (cost: food cost only)
• Extra paid day off (Diwali + day after)
• Combination: half cash + half gift

Legal and tax considerations

Bonus is taxable income for staff. Deduct TDS if applicable. For establishments under the Bonus Act (20+ employees), statutory bonus may apply.

Consult your CA for exact tax treatment and Bonus Act applicability.

• Bonus is taxable — inform staff
• Bonus Act applies to establishments with 20+ employees
• Pay before Diwali — late payment damages morale
• Keep bonus records for labour inspections

Retain staff year-round, not just at Diwali

Diwali bonus retains staff for 3–6 months. Year-round retention needs fair wages, respectful treatment, and growth opportunities.

Invest in tools that reduce owner workload so you can focus on staff relationships. DineCard QR menu saves hours of menu management monthly.

• Fair wages: at or above local market rate
• Monthly team meal — staff tries new menu items
• Recognize good performance weekly, not just annually
• DineCard saves 4–6 hours/month on menu updates — reinvest in staff

Frequently Asked Questions