Ever noticed a little extra money pop up in your bank account with the label “arrear salary”?
No, it’s not a glitch in the matrix. It’s your rightful money — just fashionably late.
In this blog, we’ll break down what arrears in salary actually mean, why they happen, and how to understand what’s owed to you. No HR-speak. Just simple, friendly finance talk.
So… what are arrears in salary?
Let’s say you got a salary hike in April — but HR took their sweet time updating it, and the new amount only kicked in from July. What about the money you should’ve earned from April to June? That’s your salary arrears — the difference between what you were paid and what you should’ve been paid.
So yeah, arrear of salary is basically delayed payment — but not out of malice. It usually happens due to updates, revisions, or adjustments in payroll after the fact.
Common Reasons Why You Get Arrear Salary:
Here’s why that bonus money might suddenly show up:
- Salary revision with retrospective effect
- Promotion or increment applied late
- Pending dues from a previous job
- Correction of past salary errors
- Backdated policy changes
The most common time employees see arrears salary is during annual appraisals or after a job switch where the previous company clears pending dues.
How is Arrear of Salary Calculated?
Here’s a simple example:
Say your old salary was ₹30,000/month. You got a hike to ₹35,000/month effective from January, but the new salary was only processed in March. That means you’re owed ₹5,000/month for Jan and Feb = ₹10,000 as arrear salary.
Your HR or payroll team typically calculates this difference automatically — and it appears in your payslip under the “arrears” or “adjustment” section.
Is Arrears in Salary Taxable?
Short answer: Yes.
Just like regular salary, your arrears in salary are added to your income and taxed accordingly. But here’s the good news — you can claim relief under Section 89(1) of the Income Tax Act.
This section helps reduce the tax burden that arises from suddenly receiving a lump sum salary arrears amount in one financial year.
If you’re salaried and got arrears that bumped your income up, you definitely want to mention it while filing taxes.
How Do You Track or Confirm Salary Arrears?
Check your payslip — usually under headings like “arrears,” “adjustments,” or “retro pay”
Ask HR or payroll — they’ll have the detailed breakdown
Look for tax deductions on Form 16 if it was a big amount
The key is to make sure the amount adds up — especially if your increment was backdated.
Final Thoughts
Getting arrears salary can feel like a surprise paycheck — but it’s actually delayed money you were always meant to get. Whether it’s from a raise, correction, or missed payment, salary arrears are perfectly normal (and very welcome).
Just remember:
- Keep track of your payslips
- Understand what you’re owed
- Claim tax relief when needed
Bonus: Galgal makes this easier
Want to keep track of salary changes, extra deposits, or adjustments without having to decode HR emails?
With Galgal, your money’s always in check — categorized, sorted, and ready to understand. From salary splits to goal-based saving, it’s the easiest way to manage income, including those sweet arrears in salary drops.
Download the Galgal App now and stay in control of your money, arrears and all.
