Arrears
Pay that was owed for an earlier period and is paid later, usually because a raise or an input was missed.
Arrears are the difference between what an employee should have been paid for a past period and what they were paid. The common cause is a salary revision approved after the month had closed.
Pay arrears as the difference only, in a later run, with the reason on the payslip. Do not reopen the old month. Tax and other components affected by the difference are recalculated on it, so the year stays right.
Illustrative example. An invented employee’s raise takes effect on 1 March but is approved in May. March and April were paid at the old rate. The arrears are the extra amount for those two months, paid in May’s run.
General information, not tax or legal advice.
See WageVerge run your payroll.
Tell us about your business and we will walk you through it, mapped to your pay components, your policies and the modules that matter to you.