An appraisal arrear is the difference between an employee's previous and current salary for the period between the appraisal effective date and the date it is actually processed. HRStop allows administrators to calculate and submit appraisal arrears for an individual employee.
Arrears are calculated based on the difference between the previous and current salary for the selected appraisal period. The calculated arrears can be disbursed in a single payroll cycle or split across multiple payroll cycles using the selected payout period.
Navigation Path: Control Panel → Payroll → Appraisals
Steps to Calculate Arrears
- Navigate to the Appraisals page.
- Locate the published appraisal record for the required employee.
- Click the Calculate Arrears icon against the record.
- Enter the Arrear Period the start and end month for which arrears need to be calculated.
- Enter the Arrear Payout Period the payroll month(s) in which the arrears will be disbursed.
- Select Consolidate all appraisal arrears as a single component if a single consolidated line item is preferred instead of component wise arrears.
- Click Calculate Arrears to generate the arrear values.
- Review the calculated values and click Submit.
Fields
| Field | Description |
|---|---|
| Last CTC | The employee's CTC before this appraisal |
| Current CTC | The employee's CTC after this appraisal |
| Previous Salary Template | The salary template applicable before this appraisal |
| Current Salary Template | The salary template applicable after this appraisal |
| Last Appraisal Effective Date | Effective date of the employee's previous appraisal |
Understanding Arrear Period and Arrear Payout Period
Consider an employee whose appraisal is effective from April, but is only triggered and published in July. The employee's salary from July onwards will already reflect the new appraised amount. However, the employee is still owed the salary difference for April, May, and June, since these months were paid at the old salary. This difference is the arrear.
Arrear Period: the months for which the salary difference is calculated - in this example, April to June.
Arrear Payout Period: the payroll month(s) in which this arrear amount is actually paid to the employee - usually the current cycle, such as July.
Some organisations prefer to split the arrear amount across more than one payroll cycle instead of paying it all at once. In that case, the same arrear amount calculated for April to June could be set to a Payout Period of July to August, and the system will split and disburse the amount across both months.
Reviewing and Submitting Arrears
Once arrears are calculated, the values are displayed in two tables:
- Calculated Arrears shows the arrear amount for each individual salary component, such as Basic, HRA, and other components. These values are auto calculated by the system but can be edited if required before submitting.
- Consolidated Arrears shows what the employee's payslip will actually display once these arrears are processed in payroll.
If Consolidate all appraisal arrears as a single component is not selected, every component will appear as a separate line item in the payslip. For example, Basic Arrear and HRA Arrear will show as two separate lines.
If this option is selected, all component values are added together and shown as a single line item, Consolidated Arrear, in the payslip. For example, if Basic arrear is ₹5,000 and HRA arrear is ₹2,000, the payslip will show only one line: Consolidated Arrear ₹7,000.
An Arrear Summary alongside the tables shows the overall Earning, Deduction, Others, and Net values for the calculated arrears.
Once submitted, the arrear values cannot be edited. Review all values carefully before submitting.
Where It Reflects
Once submitted, the calculated arrears are added to the employee's payroll record and become available for processing in the selected payout period.
Important Notes
- Only users with authorised payroll administrative access can calculate and submit appraisal arrears.
- Arrears can only be calculated for appraisals that have been published. Refer to: Managing Appraisals
- Once arrears are submitted, the values cannot be edited.
- To calculate arrears for multiple employees at once, refer to: Calculating Appraisal Arrears in Bulk
- If employee salary is already configured in HRStop Payroll, increment or appraisal letters reflecting the previous and new salary can be generated using payroll linked placeholders. Refer to: Salary Placeholders in Document Templates using HRStop Payroll Data