How to Calculate Salary Arrears in India (Simple Steps With Example)

One day your office says: "DA is raised from July. Arrears will come with this month's pay." But how much will you get? Here is a simple way to work it out yourself.

What are arrears?

Arrears are the extra money you get when a pay rise starts from an earlier date. For example, a DA hike is announced in October but applies from July. You were paid the old amount for July, August and September, so your office now pays the difference for those three months.

Arrears can come from:

• a DA (dearness allowance) hike
• a yearly increment
• a promotion
• a pay commission or pay revision

The simple formula

Arrears = extra pay every month × number of months

The extra pay every month is simply the new pay minus the old pay.

An example: DA hike

• Basic pay: Rs 30,000
• DA goes up by 3 percent (for example from 50% to 53%)
• Extra pay every month: Rs 30,000 × 3% = Rs 900
• The DA applies from July but was announced in October, so the arrears are for July, August and September: 3 months
• Arrears: Rs 900 × 3 = Rs 2,700

Why your payslip may show a different amount

The simple sum gives the gross arrears. Your real amount in hand can be different because:

• HRA may change when your pay or DA changes, in some pay rules.
• PF or GPF may be cut on the extra amount.
• Income tax (TDS) may be cut from the arrears.

The Salary Arrears Calculator India handles all of this. It shows the extra pay per month, total arrears, PF cut, a tax estimate and a month-wise table.

How to use the calculator

1. Pick the from and to months of the arrears period.
2. Enter your old basic pay and DA.
3. Enter your new basic pay and DA. Keep the basic the same if only DA changed.
4. Tick PF and add your tax rate to see the net arrears in hand.

Joined or left in the middle of a month?

Part-month salary is a different sum. If you joined on the 16th, left before the month ended, or took unpaid leave (LOP), use the Salary Proration Calculator. It supports calendar days, 30 days, 26 days and working days, so you can match your company's method.

Planning to change jobs? The Last Working Day & Notice Period Calculator helps you count your notice days.

Always check the final numbers with your accounts office. Rules, dates and deductions can be different in every office and state.