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Free letter template · Word

Arrears Salary Letter

An arrears salary letter tells an employee that they are entitled to arrears because a pay revision, DA change or correction took effect from an earlier date, and confirms the period, total amount and the payroll month in which it will be paid.

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Preview of the letter

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[Company Logo][Company Name]

ARREARS OF SALARY – INTIMATION

Ref. No.:
[Reference Number]
Date:
[Date]

To,
[Employee Name]
Employee ID: [Employee ID]
[Designation], [Department]

Subject: Payment of Salary Arrears from [Effective Date]

Dear [Employee Name],
Your salary was revised vide [Increment / Revision Letter Ref. No.] with effect from [Effective Date]. As payroll continued at the earlier rate until [Month YYYY], you are entitled to arrears for the intervening period.

ParticularsDetails
Arrears Period[DD/MM/YYYY] to [DD/MM/YYYY]
Number of Months[Number]
Monthly Gross Difference₹[Amount]
Total Gross Arrears₹[Amount]
Less: Employee PF on Basic Arrears₹[Amount]
Less: TDS (estimated)₹[Amount]
Net Arrears Payable₹[Amount]
Payment with Salary of[Month YYYY]

A month-wise arrears statement is attached. Employer PF on the arrears will be deposited to your UAN [UAN] along with the regular contribution. If any part of these arrears relates to an earlier financial year, you may consult your tax adviser on claiming relief while filing your return.

For any clarification, please contact [HR Name] at [HR Email].

Regards,

For [Company Name]
[Authorised Signatory]
[Designation]

What this template includes

  • Reason and effective date of the revision
  • Arrears period (from and to)
  • Monthly difference and total arrears
  • Payroll month of payment
  • Impact on PF and TDS
  • Note on tax relief claim for arrears of earlier years

When to use it

  • Annual increments approved after their 1 April effective date
  • Minimum wage or DA revisions notified with a back date
  • Promotion approved retrospectively
  • Settlement or policy change granting a retrospective benefit

How to customise this template

  1. 1Enter the revision reference (increment letter or notification)
  2. 2Compute monthly difference in gross and multiply by months
  3. 3Mention whether PF will be deducted on arrears of Basic
  4. 4Attach the arrears statement for detailed month-wise working

HR tips

  • Pay arrears in one go rather than spreading them over months
  • Account for LOP days in each arrears month
  • Tell employees arrears may push TDS higher in the payment month
  • Keep this letter short; put the working in the arrears statement

For HR & hiring managers

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Frequently asked questions

What are salary arrears?+

Arrears are the difference between what an employee was paid and what they should have been paid after a backdated revision, paid later as a lump sum.

Is PF deducted on arrears?+

PF is generally payable on arrears of wages that form part of PF wages, such as Basic and DA, subject to your PF wage policy.

How is tax calculated on arrears?+

Arrears are taxed in the year received. If they relate to an earlier financial year, the employee may claim relief under the income tax provisions by filing the prescribed form.