Arrear Period is the set of months for which the salary difference is calculated.
Arrear Payout Period is the payroll month or months in which this arrear amount is actually disbursed to the employee. These two periods do not need to be the same.
Example:
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 Arrear Payout Period of July to August, and the system will split and disburse the amount across both months.
