UK Accounting Glossary
Back pay is a payment due for work done prior to the current pay period. Back pay may be the result of a missed payment or a payment that was intentionally not made, or back pay may be owed due to a backdated pay increase. Back pay applies to both hourly as well as salaried employees, and back pay may also be applied to over-due payments owed to freelance workers, part-time employees, as well as consultants. If a company is chronically late in the payment of wages and salaries and owes considerable back pay to its employees, that is often a sign that a company is in financial trouble. Back pay may also be referred to as back salary or back wages.
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This glossary post was last updated: 4th February 2020.