Mentioned below the status of Payment of Bonus Act regarding allocable surplus , Set On & Set off.
Payment of Bonus Act, 1965
15. Set on and set off of allocable surplus
(1) Where for any accounting year, the allocable surplus exceeds the amount of maximum bonus payable to the employees in the establishment under section 11, then, the excess shall, subject to a limit of twenty per cent of the total salary or wages of the employees employed in the establishment in that accounting year, be carried forward for being set on in the succeeding accounting year and so on up to and inclusive of the fourth accounting year to be utilized for the purpose of payment of bonus in the manner illustrated in the Fourth Schedule.
(2) Where for any accounting year, there is no available surplus or the allocable surplus in respect of that year falls short of the amount of minimum bonus payable to the employees in the establishment under section 10, and there is no amount or sufficient amount carried forward and set on under sub-section (1) which could be utilized for the purpose of payment of the minimum bonus, then such minimum amount or the deficiency, as the case may be, shall be carried forward for being set off in the succeeding accounting year and so on up to and inclusive of the fourth accounting year in the manner illustrated in the Fourth Schedule.
(3) The principle of set on and set off as illustrated in the Fourth Schedule shall apply to all other cases not covered by sub-section (1) or sub-section (2) for the purpose of payment of bonus under this Act.
(4) Where in any accounting year any amount has been carried forward and set on or set off under this section, then, in calculating bonus for the succeeding accounting year, the amount of set on or set off carried forward from the earliest accounting year shall first be taken into account.
The above will clarify your query about set on & set off vs allocable surplus. Now you have another query if allocable surplus is less than the maximum bonus - the % of bonus will be any thing between 8.33% to 20%.
But bonus accounting is the function of Finance department to determine available surplus, allocable surplus, set on and set off. We as HR professional may have some conceptual idea.
Thanks & Regards,
S K Bandyopadhyay
USD HR Solutions
26th July 2017 From India, New Delhi