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All-in-one HR platform · v2.0
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All-in-one HR platform · v2.0
14-day free trial · No credit cardhello@HrMagix.com
When a revision is approved with an earlier effective date, the monthly difference multiplied by the months already paid at the old rate.
A salary revision is often approved weeks or months after its effective date. The months already paid at the old salary then carry arrears: the difference between the revised and old monthly salary for each of those months.
This salary arrears calculator adds whole months and, where the effective date fell mid-month, the pro-rated part of that first month.
Enter your figures, then press Calculate
Your 8 inputs become a full breakdown, with every step of the working shown beneath the headline figures.
Arrears are the difference between what should have been paid and what was paid, for each month the revision covered. Whole months first, then any part month.
Arrears = (Revised monthly salary − Old monthly salary) × Full months + Difference × Part-month days ÷ Days in that month
Revised salary less old salary, on the same component basis. If each component changed differently, work each one separately and add them.
Full months from the effective date up to, but not including, the first month paid at the new rate.
If the revision took effect mid-month, pro-rate that month's difference by days from the effective date over the calendar days in the month.
If the employee had loss-of-pay days in the arrears months, the arrears for those months should be pro-rated in the same way their salary was.
What this does not include
Asked often enough about this calculation to be worth answering beside it.
Multiply the monthly difference between the revised and old salary by the number of months already paid at the old rate, and add a pro-rated amount for any part month at the start.
Yes, on the basic and DA part of the arrears, subject to the wage ceiling your establishment applies. Employee and employer contributions are both due.
Arrears are added to salary and taxed in the year they are paid. Because that can push income into a higher bracket, the employee can claim relief under s.89 by filing Form 10E.
Arrears for those months should be pro-rated the same way the salary was, so a month with LOP days carries proportionately less arrears.
The calculator shows nothing payable. Recovering past salary from an employee is a separate question that depends on the contract and the Payment of Wages Act rules on deductions.
A calculator applies a rule to figures you type in. A payroll run applies it to your actual employee record, your locations and your verified declarations, which is where Professional Tax, LWF and TDS also resolve.
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