In arrears

Wages paid after the pay period ends.

Definition

Pay 'in arrears' means wages for a completed work period are deposited on a payday that falls after the period ends, with a processing lag of two to seven business days. This is the U.S. norm and is required by the timing of overtime calculation: hours worked must be tallied after the workweek closes before overtime can be computed. The opposite — 'current' pay, where wages are estimated and paid on the same day work is performed — is administratively rare and risky because it requires clawbacks if the employee leaves mid-period.

Example

If your pay period ends Saturday and your payday is the following Friday, you are paid one week in arrears.

Related terms

• Pay period — The recurring window of time covered by a single paycheck.
• Pay frequency — How often paychecks are issued.
• Payday — The calendar day wages are deposited.
• Biweekly — Every other week — 26 paychecks per year.
• Semimonthly — Twice per month on fixed dates — 24 paychecks per year.
• Gross pay — Total earnings before any deductions.

See also

• Pay schedule calculator — convert salary to per-paycheck amount
• Pay frequencies primer — weekly, biweekly, semimonthly, monthly
• Frequently asked questions