Arrears

Arrears are withheld payments that the employee should have received. It's money that the employee is owed. Arrears should be paid as soon as possible, but there is no government regulation enforcing this.

According to the arrear's definition, it can include sick pay, vacation pay, overtime, and severance pay, but it does not include unpaid wages.  Employers and employees may prefer arrears payment over pay-in-advance because it gives them more flexibility with their cash flow, but there is also a higher risk involved when paying in this way.

There are a variety of reasons why someone might be paid in arrears. It could be that the employer has already paid out their salaries and is waiting for their employees to work in order to collect on those debts. Alternatively, it could also be that the employee is receiving bonuses or commissions and these are being given only after they've earned them.

What does arrears mean? You already know. But could it be useful for your company? There are positives and negatives to paying employees in arrears when this occurs.  

Arrears, in the context of business operations, are a way to get paid. They can be used to pay off debt and cover future expenses. In addition to helping you meet your immediate financial needs, arrears can also be put towards investment activities in order to grow your company's profits and increase its overall value.