Page 157 - DCOM207_LABOUR_LAWS

Labour Laws

Notes 9.4.4 Set-on and Set-off of Allocable Surplus [Sec. 15]

Set-on (In case of huge profits)
Excess allocable surplus, remained after paying the maximum bonus of 20% on the wage or
salary of the employee, Should be carried forward to the next following year to be utilized for
the purpose of payment of bonus in case of the shortage of the allocable surplus or losses occur.
This is called as Set-on.
Set-off (in case of losses occur)
When there are no profits (available surplus or allocable surplus) or the amount falls short or
deficiency for payment of minimum bonus to employees 8.33%, such deficiency amount should
be adjusted to the current accounting year from the Set-on amount which was carried forward in
case of excess allocable surplus in the previous year. This is called as Set-off.

Example:

l z In this Schedule, the total amount of bonus equal to 8.33 per cent of the annual salary or
wage payable to all the employees is assumed to be ` 1,04,167. Accordingly,
l z Maximum bonus to which all the employees are entitled to be paid (20% of the annual
salary or wage of all the employees) would be ` 2,50,000.

Year Amount equal to sixty per Amount payable Set on or set off the Total set on or set off
cent. or sixty-seven per as bonus year carried forward Carried Forward
cent, as the case may be,
of an available surplus
allocable as bonus

` ` ` ` of (year)

1. 1.04.167 1.04.167** Nil Nil

2. 6,35,000 2,50,000* set on 2,50,000* set on 2,50,000* (2)

3. 2,20,000 2,50,000* Nil Set on 2,20,000 (2)
(inclusive of
30,000 from
year-2)
4. 3,75,000 2,50,000* Set on 1,25,000 Set on 2,20,000 (2)
1,25,000 (4)

5. 1,40,000 2,50,000* Nil Set on 1,10,000 (2)
(inclusive of 1,25,000 (4)
1,10,000 from
year-2)
6. 3,10,000 2,50,000* Nil Set on Nil + 1,25,000 (2)
60,000 (4)
(6)

Contd...

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