Understanding "Set On" and "Set Off" in the Bonus Act: Can Anyone Clarify?

Dear All,

Please tell me the actual meaning of "set on" and "set off" in the bonus act.

Regards,
Rahul

Dear,

These are terms used in the Bonus Act to decide the percentage of bonus to be paid to employees.

Set on - First, we calculate allocable surplus, and out of that surplus, we pay bonus. After paying the maximum bonus, i.e., 20%, if some amount is left, the balance is called set on, and this amount is kept in reserve for the future.

Set off - If in any accounting year you do not have sufficient surplus and are unable to pay the minimum bonus of 8.33%, then, legally, you have to pay 8.33%. The balance amount that you do not have in surplus will be shown as set off for the future.

You have to take care of set off/on in the future before deciding the rate of the bonus.

Thanks,
J. S. Malik

Dear Seniors,

How do I calculate the percentage of bonus to be paid based on a set amount in a particular financial year?

B. Prasad
01294092235

Does the schedule and forms of bonus act require attestation services by a Chartered Accountant (CA)?

Please let me know if you need further assistance or clarification on this matter.