Salary Arrears Calculator is a simple and ready-to-use excel template to calculate month wise salary arrears with salary break-up. You can calculate salary arrears up to 35 years.
Salary Arrears means the previous salary dues that an employer pays in the current month or year.
Usually, these delays can be either natural or artificial. Natural causes include delay in opening a bank account, payment system failures, etc. Whereas artificial causes include, lawsuits, delayed promotions, etc.
An employee’s bank account process took 2 months to open and he/she receives 2 months salary in arrears. It is an example of natural causes.
An employee is due for promotion and not promoted for any company reason. Later on, the company decides to pay him the difference in salary for that delayed period. It is an example of artificial causes.
In simple terms, Salary Arrear is the difference between current and incremental salary.
Let us understand it with an example.
Anuj’s is having a salary of 10,000 salaries. He files a lawsuit for not getting promotion for a period of time or for some valid reason.
Anuj wins the case and the company was instructed by the Court of Law to pay salary arrears for past one year on a new pay scale which was demanded by Anuj.
Previous Salary Breakup of Anuj = 5,000 Basic + 2,000 HRA + 1,000 DA + 1,000 Conveyance + 1,000 Medical
New Salary Breakup of Anuj = 8,000 Basic + 3,000 HRA + 2,000 DA + 2,000 Conveyance + 2,000 Medical
Total of the previous salary already paid is 10,000 per month and the total of newly approved salary is 17,000.
Now there are 2 scenarios that can be taken into account:
If the company hasn’t paid a single rupee during that period. In this case, he is entitled to the following:
17,000 X the total number of unpaid months.
He is paid as per the previous salary that is 10,000. Now he is eligible for the difference of pay.
(17,000 – 10,000) X the total number of partly paid months.
Salary Arrears Calculator Excel Template
To simplify the process of calculating arrears we have created a simple and easy Salary Arrears Calculator with predefined formulas.
You just need to enter the previous and newly approved amounts under each head of the salary. The template will automatically calculate the difference and provide you with the amount of Salary Arrears.
How To Use Salary Arrears Calculator?
This template consists of 3 sections:
- Total Gross Salary
- Total Deductions
- Differential Arrears
The first 2 columns are for Month and Year.
To select the month use the drop-down list. All 12 months starting from January to December.
Similarly, to select year use the drop-down list.
Years Starting from 1990 to 2025. You can calculate the arrears for about 36 years using this template.
Top panes have been frozen using the Freeze Panes Function. Select the cell from where you want to freeze.
Go to Ribbon -> View -> Click on “Freeze Panes”
1. Total Gross Salary
Gross Salary is the total amount of salary without any kind of deductions. Components of gross salary differ from country to country as well as company to company. It consists of heads according to Indian salary markups:
Dearness Allowance (DA)
House Rent Allowance (HRA)
There are 2 columns for each head. One is for inserting the actual amount and the second for the revised amount. In the end, there are 2 columns; Total Gross Salary and Revised Total Gross Salary.
2. Total Deductions
Deductions include a contribution to PF, Professional Tax, TDS (Tax Deductions at Source), and Salary Advances (if any).
Similar to the gross salary section, this section also has 2 columns for each head. Insert current amount in first and revised in second.
3. Differential Arrears
The Net payable salary and revised Net salary are calculated using the below-given formula:
Net Salary/Revised Net Salary = Total Gross Salary – Total Deductions
Net salary is the amount payable to the employee/you. Whereas, the Revised Salary is the incremental amount to be paid. So the difference between these both amounts is the salary arrear to be paid by the employer/company to the employee/you.
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