Salary Arrears: Meaning and Purpose
Salary arrears are the unpaid or revised pay owed to an employee for a past period, such as after a delayed increment. This calculator totals the shortfall over the months affected.
Factors That Affect the Result
- Old and revised monthly salary
- Effective date of the revision
- Date up to which the old salary was paid
- Statutory deductions on the arrears
- Taxation under relief rules
How the Salary Arrears Is Calculated
Monthly difference = New monthly salary − Old monthly salary
Arrears = Monthly difference × Number of months
Partial months are prorated on a 30-day basis
Worked example
A revision from ₹40,000 to ₹45,000 applied four months late gives ₹5,000 × 4 = ₹20,000 in arrears.
How to Use This Calculator
- 1Enter the values in the fields on the left. Use figures from your payroll or policy.
- 2The result updates instantly as you type. Change any input to compare scenarios.
- 3Copy the result or print it to attach to your records.
- 4Check the notes under the result for statutory limits and policy points that may apply.
Why It Matters
A transparent arrears calculation reduces payroll disputes and helps you pay the correct figure in the next pay run.
Compliance note: Statutory deductions such as PF and TDS may apply to arrears. The tool shows the gross amount only.
Disclaimer: This tool and the sample content are for general guidance and are not legal, tax or financial advice. Laws, rates and limits change and differ by state and company policy, so verify them with a qualified professional before relying on the output.
Frequently Asked Questions
How are arrears calculated?
Multiply the monthly difference between the revised and old salary by the number of months for which the revision was not paid, prorating partial months.
Are arrears taxable?
Yes, they are part of salary income. An employee may claim relief under section 89 in the relevant year, subject to the rules.
Is PF applicable on arrears?
Where the revised basic is PF-eligible, contributions on the arrears may apply. Check with your payroll provider.
When should arrears be paid?
Pay them in the earliest possible payroll cycle after the revision is approved, with a clear breakup on the payslip.
Is this salary arrears calculator free to use?
Yes. It is free, needs no signup, and your inputs stay in your browser.
How can Trilliant Software help with payroll calculations?
Trilliant Software calculates salary, statutory deductions, arrears and tax automatically in every pay run, so HR does not need to repeat these calculations by hand. Book a demo to see it working.