How Back Pay Is Calculated
Back pay = Pay rate owed × Hours per week × Weeks owed
Retro pay = (New rate − Old rate) × Hours per week × Weeks owed
For salaried pay, the weekly amount is the annual salary ÷ 52. A $4,000 raise is $76.92 a week, so 12 weeks owed are $923.08.
Back Pay vs Retro Pay
Back pay is pay for work that was never paid; retro pay is the difference between what was paid and a higher rate that already applied. Both are wages taxed in the year they are paid.
Under the FLSA, back wages for unpaid minimum wage or overtime can be recovered for 2 years, or 3 years for a willful violation, through the Department of Labor Wage and Hour Division or a lawsuit. Courts can add an equal amount as liquidated damages.
How Back Pay Is Taxed
Back pay is withheld as a supplemental wage: 22% federal plus 6.2% Social Security, 1.45% Medicare and state tax. $7,040 of back pay leaves $4,952.64 after withholding in a state with no income tax.
Veterans disability and Social Security disability back pay follow separate VA and SSA rules and are not wages. The Severance Pay Calculator covers separation pay.
Back Pay for Salaried Employees
Back pay on a salary is the weekly salary, annual pay ÷ 52, times the weeks that went unpaid. Hours per week do not matter for the calculation.
Six unpaid weeks on a $52,000 salary are $1,000 a week, or $6,000 in total. After the 22% federal flat rate and $459 of Social Security and Medicare, the check is $4,221 in a state with no income tax.
For a gap shorter than a week, the Prorated Salary Calculator works out the pay by working days.
Retro Pay Examples
Retro pay grows with the size of the raise and the number of weeks it was late. The table runs common cases through the calculator, in a state with no income tax.
| Raise | Weeks late | Retro pay | After withholding |
|---|---|---|---|
| $20 to $21.50 an hour | 10 | $600 | $422.10 |
| $17 to $18 an hour | 26 | $1,040 | $731.64 |
| $58,000 to $62,000 a year | 12 | $923.08 | $649.38 |
| $75,000 to $80,000 a year | 20 | $1,923.08 | $1,352.88 |
Hourly rows assume 40 hours a week. When the raise was a percentage, the Pay Raise Calculator gives the new rate to enter.
Back Pay for Unpaid Overtime
Unpaid overtime back pay is the overtime hours × 1.5 times the regular rate × the weeks owed. The calculator covers straight-time hours, so add overtime with this formula.
Overtime back pay = Hourly rate × 1.5 × Overtime hours per week × Weeks
Five unpaid overtime hours a week at $22 an hour for 8 weeks are $1,320. When a court or the Department of Labor adds an equal amount as liquidated damages, the total owed becomes $2,640.
When the worker was paid for those hours at the straight rate, only the half-time premium is owed: $440 for the same weeks. The Overtime Calculator shows a full overtime week.
How to Claim Unpaid Wages
Most unpaid wage claims start with a written request to the employer, then a complaint to a labor agency if the money does not come.
- Gather records: pay stubs, schedules, your own time log and messages about hours.
- Total the amount: use this calculator and keep the inputs with your request.
- Ask the employer in writing for the wages owed.
- File a complaint with the Department of Labor Wage and Hour Division, which is free, or with your state labor department.
- Consider a lawyer for a large claim; the FLSA lets a winning worker recover attorney's fees.
The FLSA forbids firing or punishing a worker for filing a wage complaint.
VA Disability and SSDI Back Pay
VA disability and SSDI back pay are benefit arrears, not wages, so the 22% supplemental rate and FICA do not apply to them.
- VA disability back pay covers the months from the effective date of the claim to the decision. VA disability compensation is not taxable.
- SSDI back pay starts after a 5-month waiting period and can reach up to 12 months before the application month. Part of SSDI can be taxable at higher incomes; IRS Publication 915 lets you figure a lump sum as if it had been paid in the earlier years.
This calculator handles wages owed by an employer. Use the agency's award letter for benefit back pay.
Back Pay After a Government Shutdown
Federal employees receive back pay for a lapse in appropriations by law: the Government Employee Fair Treatment Act of 2019 guarantees it for both furloughed and excepted workers once funding returns.
The amount is the regular pay for the missed pay periods. A furloughed worker on $52,000 a year who misses 2 weeks is owed $2,000 before tax. Back pay for other unjustified personnel actions falls under the Back Pay Act, 5 U.S.C. 5596.
Frequently Asked Questions
How is back pay calculated?
Back pay is calculated by multiplying the pay rate owed by the hours or weeks not paid. 60 unpaid hours at $18 an hour is $1,080 of back pay before tax.
Is retroactive pay the same as back pay?
No. Retroactive pay is the raise owed on hours already paid at the old rate; back pay is pay for hours never paid.
How far back can you claim unpaid wages?
You can claim unpaid wages 2 years back under the FLSA, or 3 years for a willful violation. Many states allow longer periods.
How much will my back pay be?
Your back pay is the weekly pay owed × the weeks owed. Eight weeks at $22 an hour and 40 hours a week come to $7,040 before tax.
How much is back pay after taxes?
Back pay after taxes is about 70% of the gross in a state with no income tax, after 22% federal and 7.65% FICA. $7,040 leaves $4,952.64.
Is VA disability back pay taxable?
No. VA disability compensation, including the back pay, is not taxable federal income.
Can I get back pay for unpaid overtime?
Yes. Unpaid overtime is owed at 1.5 times the regular rate, plus possible liquidated damages. Five hours a week at $22 for 8 weeks is $1,320.
Does back pay count for Social Security?
Yes, wage back pay is taxed for Social Security and Medicare. Back pay awarded under a statute can be credited to the years it was earned when the employer reports it to the SSA.