© 2026 CoAd. All rights reserved.
Arrears refers to money that is owed but has not yet been paid. In payroll, it often means an employee is paid after the work has already been completed rather than during the same pay period.
Arrears means a payment is due after the period in which the work, service, or expense occurred. In payroll, paying in arrears means employees receive their wages after the pay period has ended.
For example, if an employee works from the 1st through the 15th and is paid on the 20th, that payroll is being paid in arrears. The delay gives the employer time to finalize hours worked, overtime, commissions, deductions, and other payroll details before issuing payment.
Arrears can also refer to unpaid amounts that have fallen behind. An employer might use the term for missed benefit deductions, overdue wages, or other amounts that still need to be collected or paid.
Paying employees in arrears is common and can make payroll processing more accurate, especially for hourly employees or anyone whose pay changes from one period to the next. Employers still need to follow applicable state and local payday laws, which can set limits on how long wages may remain unpaid.
Paid in arrears means payment is made after the work or pay period has already been completed. In payroll, employees work first and receive payment on a later scheduled payday.
No. A payroll schedule can intentionally pay in arrears and still be on time. A payment is late when it is made after the employer's required or scheduled payday.
Paying in arrears gives employers time to confirm hours worked, overtime, commissions, deductions, and other payroll information before calculating the final paycheck.
Yes. In payroll and benefits, arrears can also describe an amount that should have been collected or paid earlier but is still outstanding.