The Union Cabinet has approved a productivity-based bonus equivalent to 78 days’ wages for eligible non-gazetted railway employees for the financial year 2025-26. The decision will benefit around 11.4 lakh workers, and each eligible employee can receive a maximum of Rs 17,951.
The bonus will cost the government around Rs 2,009.61 crore, according to reports on the Cabinet decision. Employees in several categories, including track maintainers, loco pilots, train managers, station masters, technicians and ministerial staff, are among those covered by the scheme.
The payout follows a long-running demand from railway employee organisations to revise the salary ceiling used to calculate the bonus. The monthly ceiling has been Rs 7,000 since 2014-15, and the maximum bonus is Rs 17,951.
Why employees want salary ceiling raised
The 78-day bonus is calculated using a prescribed monthly wage limit rather than each employee’s full salary. Under the existing formula, the Rs 7,000 ceiling sets the maximum payout at Rs 17,951.
Railway employee organisations, including the Indian Railways Technical Supervisors Association (IRTSA), have sought an increase in the calculation limit to at least Rs 18,000. At that level, the bonus for 78 days would work out to around Rs 46,184.
The demand seeks to revise the basis for calculating the payment, which has not changed in more than a decade. The proposed increase would substantially raise the maximum bonus, but employee groups have only demanded the revision and the Cabinet has not approved it.
The bonus is an annual payment based on productivity for eligible non-gazetted staff. The Indian Railways handled 1,670 million tonnes of freight and nearly 7.41 billion passengers in the financial year 2025-26, according to reports. The government has cited railway employees’ contribution to the organisation’s performance as the basis for the annual payment.
A higher calculation limit
The issue was also taken up by CPI(M) Rajya Sabha MP John Brittas, who wrote to Railway Minister Ashwini Vaishnaw seeking changes to the bonus formula for 2025-26. His letter called for an increase in the number of payable days and a revision of the wage ceiling used to calculate the amount.
He referred to a demand raised by the Centre of Indian Trade Unions (CITU) to set the monthly calculation limit at a minimum of Rs 28,440. The proposed ceiling is based on an assessment of minimum wages and dearness allowance, according to the letter.
He urged the government to decide the matter ahead of the festive season, arguing that an increase would provide additional financial support to railway employees and their families.
The proposal to raise the calculation ceiling to Rs 28,440 is separate from the Indian Railways Technical Supervisors Association (IRTSA) and other railway organisations’ demand for a limit of at least Rs 18,000. Both seek a higher bonus, but they propose different wage limits for working out the payment.
Coal India, SAIL bonuses raise stakes
Railway employee groups have also compared their bonus payments with those given to workers at Coal India and the Steel Authority of India Limited (SAIL). They say bonuses at these public sector companies have risen over the past decade, while the maximum railway payout is still capped at Rs 17,951.
Coal India employees received a bonus of Rs 1.03 lakh last year, according to employee groups. SAIL employees received around Rs 29,500. This year, estimates suggest Coal India staff could receive Rs 1.10 lakh and SAIL employees Rs 40,000.
The proposed amounts for this year should be treated as estimates until the respective companies formally announce their payments. Railway employees have cited these payouts while demanding a higher wage ceiling for calculating their own bonuses.
