What is Set-On and Set-Off under Payment of Bonus Act, 1965?

(i) Set-On:
Where in an accounting year, the allocable surplus exceeds the amount of Bonus payable to the employees under the Payment of Bonus Act, the excess amount shall subject to 20% of the total salary or wages of the employees employed during the account year shall be carried forward for being Set-On in the succeeding accounting year and so on to be utilised for the purpose of payment of Bonus.

(ii) Set-Off
Where in an accounting year, there is no allocable surplus or the allocable surplus of that accounting year falls short of the amount payable to the employees under the Payment of Bonus Act and there is no sufficient amount already set-on, then no such amount as is necessary for payment of Bonus under the Payment of Bonus Act shall be carried forward for being set-Off in the succeeding account year.&

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