Struggling with Bonus Act Calculations? Need Help with Allocable Surplus, Set Off, and Set On?

Hi!

Can someone kindly help me with the calculation of the Allocable surplus, Set Off, and Set On under THE PAYMENT OF BONUS ACT. Kindly explain with examples.

Regards,
Shyamali

Dear Shrami,

As per the Bonus Act, first, we need to calculate the available/allocable surplus based on the financial sheet you arrived at in your concern (from A & B).

Calculation:
Available Surplus = Net Profit - Direct/Indirect Tax payable by the employer Tax Payable.
Allocable Surplus = 60% of Available Surplus,
in the case of Foreign Companies, it's 67% of Available Surplus.
To calculate the amount of bonus in respect of the Accounting Year, Allocable Surplus is computed after considering the amount of Set ON & Set OFF from the previous year.
The amount so computed from Allocable Surplus is distributed in proportion to Wages/Salaries received by them during the Accounting Year.
Min: 8.33% and Max 20% have to be paid.
Eligibility: Drawing Salaries from 2500 to 3500 will be paid on the basis of Rs. 2500/-
If you are still unclear, please get back to me.

Regards,
Rangaraj

Please provide an example of the set-off and set-on calculation for the payment of a bonus.

Regards,
Rejimon

The eligibility for the bonus is now Rs. 10,000 per month; however, the calculation/computation will be based on Rs. 3500 per month.

Is there any Excel formula derived as per the guidelines to facilitate the same?

Pankaj Sibal