25 October 2008
Can anybody answer the following topics ASAP:- 1)What is Exgratia Payment? 2)What is Dearness Allowance? 3)What are Available Surplus, Allocable Surplus,Set Off & Set On for calculation of Bonus? 4)What does it mean by 1st,2nd,3rd & 4th Schedule for calculation of Bonus & these schedules belong to which Act?
25 October 2008
Ex gratia payment is a payment made voluntarily without any obligation.
Dearness allowance is a compensation for raising cost of living
Available surplus is the surplus that is available for consideration of distribution of bonus as per payment of bonus act. Set-off is what was paid as minimum bonus without there being a surplus. Set-on is the surplus that is there after distribution of statutory bonus
25 October 2008
Thanks Mr.Raghavan for a excellent answer.Would you please tell something more i.e. how this Available surplus & Allocable surplus is arrived at.
27 October 2008
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 wage 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 utilised 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 of sufficient amount carried forward and set on under sub-section (1) which could be utilised 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.]
27 October 2008
Bonus payable under the Act is linked with profits. The employer has to calculate gross profits of his establishment in the manner specified in section 4. Then, from gross profits so calculated he has to deduct the sums referred to in section 6 as prior charges. The balance is called available surplus. A percentage of the available surplus calculated in accordance with the provisions of sub-section (4) of section 2 is called allocable surplus.
Where, in respect of any year the allocable surplus exceeds the amount of minimum bonus payable to the employees' the employer must pay to every employee in respect of that year bonus in proportion to the salary or wage earned by the employee during the year subject to a maximum of twenty per cent of such salary or wage.
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