Back pay
Workforce Management Glossary
Back pay
What is back pay?
Back pay is essentially money owed to employees from their employers. Back pay can take the form of unused annual leave unpaid overtime or payroll errors such as not recognising pay-rise increases. Back pay may also be owed to employees if a business is found to have violated minimum wage rules.
How can a business action back pay?
When employees or employers notice that back pay needs to be actioned the traditional form of correction would be to include any and all back pay in the next pay cycle. Pay cycles will vary from business to business so this could be rectified in the employee’s fortnightly pay monthly pay or semi-monthly pay.
Back pay can be actioned at another date outside of the typical pay cycle. This is under the provision that the date is agreed upon by both parties and is documented in writing.
What can businesses do to manage payroll better?
In some instances back pay is the result of allotted annual leave not being taken. In other instances back pay is needed due to administrative errors when actioning payroll. In order to minimise these human errors businesses can implement payroll software.
With Roubler’s cloud payroll software the intuitive all-in-one system automatically draws in employee details for processing. By eliminating the need for manual data entry businesses can work to ensure that payroll can be processed both quickly and accurately no matter the pay cycle.