How to Calculate Pay and Allowance Arrears
Arrears are the amount of pay or allowances that became due for a past period but were not paid at the time. They usually arise when an increment, a pay revision, a new allowance rate or a pay fixation is applied with effect from an earlier date.
This calculator works out the arrears of each pay component separately for full months and for part-months, and shows the working for every line, so you can check it against your own calculation or the accounts office statement. It can be used by Federal employees and by employees of Punjab, Sindh, Khyber Pakhtunkhwa and Balochistan, because you enter the amounts yourself.
The Arrears Formula
For each component, the calculator uses this method:
- Full months: monthly amount × number of full months.
- Part-month: monthly amount ÷ days in that month × number of days.
- Total for the component: full-months arrears + part-month arrears, rounded to the nearest rupee.
When you tick "Calculate difference", the monthly amount used is the revised rate minus the amount already drawn, so the result shows only the amount still payable.
Should You Divide by 30 or by the Actual Days of the Month?
For a part-month, the calculator divides the monthly amount by 30 by default. Some accounts offices instead divide by the actual number of days in that month — 28 or 29 for February, 30 or 31 for other months. Choose the month length your accounts office uses so that your figure matches theirs.
The choice only affects part-months. Full months are always counted at the full monthly amount.
Worked Examples
Example 1: Basic pay arrears for 1 month and 18 days
Basic pay is Rs 45,000 and arrears are due for 1 full month and 18 days, using a 30-day month. Full month: Rs 45,000. Part-month: Rs 45,000 ÷ 30 × 18 = Rs 27,000. Total arrears: Rs 72,000.
Example 2: Two allowances for 18 days of a 31-day month
House Rent Allowance is Rs 9,000 and Conveyance Allowance is Rs 5,000, due for 18 days of a 31-day month. House Rent: Rs 9,000 ÷ 31 × 18 = Rs 5,226. Conveyance: Rs 5,000 ÷ 31 × 18 = Rs 2,903. Total arrears: Rs 8,129.
Example 3: Increment arrears using the difference option
After an increment, basic pay is Rs 52,000, but Rs 50,000 was drawn, so the difference is Rs 2,000 a month. Arrears are due for 3 full months, 10 days of a 28-day February and 12 days of a 31-day month. Full months: Rs 6,000. February: Rs 2,000 ÷ 28 × 10 = Rs 714.29. Last month: Rs 2,000 ÷ 31 × 12 = Rs 774.19. Total arrears: Rs 7,488.
Common Reasons for Arrears
- An annual increment that was not drawn on time.
- A pay revision or new pay scales notified with effect from an earlier date.
- A revised rate of an allowance, such as House Rent, Conveyance, Medical or Adhoc Relief Allowance.
- Pay fixation after promotion, upgradation or time scale, applied from an earlier date.
- Restoration of an allowance that was stopped and later allowed for the past period.
Before You Submit an Arrears Claim
- Keep a copy of the notification or office order that makes the payment due, and note its effective date.
- Write down the exact start and end dates of the arrears period, and count the full months and the days at each end.
- Work out each component separately, as this calculator does, because different allowances may have different effective dates.
- Remember that the final arrears are worked out and paid by your accounts office (AGPR, AG or District Accounts Office), and deductions may apply.
Frequently Asked Questions About Pay and Allowance Arrears
How are arrears for part of a month calculated?
The monthly amount is divided by the number of days in the month (30 by default) and multiplied by the number of days for which arrears are due. For example, Rs 30,000 for 10 days of a 30-day month is Rs 30,000 ÷ 30 × 10 = Rs 10,000.
Should I divide by 30 or by the actual days of the month?
Use the method your accounts office follows. The calculator uses 30 by default, and you can choose 28, 29 or 31 for any part-month to match the actual days of that month.
Can I calculate arrears of an annual increment?
Yes. Tick "Calculate difference", enter the revised basic pay as the monthly amount and the basic pay already drawn, and the calculator works out arrears on the difference only.
Can I add more than one allowance?
Yes. Use "Add another component" to add up to 10 components, such as basic pay, house rent, conveyance and adhoc relief allowances. Each one is calculated and shown separately.
Does this calculator work for Federal and provincial employees?
Yes. The method is the same for Federal, Punjab, Sindh, Khyber Pakhtunkhwa and Balochistan employees, because you enter the monthly amounts yourself from your pay slip or the relevant notification.
Are the arrears rounded?
Yes. The arrears of each component are rounded to the nearest rupee, and the grand total is the sum of the rounded amounts.
Is income tax deducted on arrears?
Arrears of salary are taxable in the tax year in which they are received. Under section 12(7) of the Income Tax Ordinance, 2001, an employee may instead elect to have the arrears taxed at the rates that applied in the tax year to which they relate.
Does the calculator know the current pay and allowance rates?
No. It calculates arrears from the amounts you enter. To find your basic pay or revised pay after promotion, use the Basic Pay Scale Calculator or the Pay Fixation Calculator first.