The principle of set on and set off of allocable surplus is as follows: Where, for any year, the allocable surplus exceeds the maximum bonus payable to the employees, then the excess shall, subject to the limit of twenty percent of the total salary or wages of the employees, be carried forward to be set on in the succeeding year. This process continues to be utilized for the purpose of bonus payment. In cases where, for any year, there is no available surplus or the allocable surplus falls short of the minimum bonus payable to the employees, and there is no sufficient amount carried forward and set on, the minimum amount or the deficiency shall be carried forward to be set off in the succeeding year and so on.
Regards,
Brijesh