Payroll paid in "arrears" - how does this work?

Question

My new company pays "in arrears" - what does this mean for me? I just started, and have been told that, even though I worked two weeks already and thought I would get paid on the 30th, I won't be paid until the next cycle. Will I be paid a full one-month? Or will the first two weeks be held until I leave the company? Does it vary by company? Someone please explain this concept in dummy-friendly terms. Thank you!

PS - I will vote a Best Answer, so give me whatcha got!! :-)

Answer 1

Think of Arears like the word rear - or behind. In other words they pay you for the two weeks that are now "behind" you. You've already worked them, they just need to calculate the hours and pay you. I'll explain:

You work 1 week

You're in your second week and the company calculates your pay for the week you've already worked, not the week you're currently in. At the end of the second week they pay you for the first week. At the end of week 3 you get paid for the time you put in for week 2.

The hard part is when you join a company right after a pay-date, like you did. Everyone else worked 2 weeks and now the company will calculate that and pay them. YOU however worked NO hours so you won't get a check. You have to work these first two weeks and then they calculate the hours and pay you at the end of week 3 or 4.

It's hard and most companies don't do it that way. Most companies pay you for one week worked and the current week you're in - basing it on a normal 40 hour work week. If you put in any overtime or take a day off they calculate that and just deduct it from your next paycheck.

It's all very confusing and I'm sorry you're going to have to wait so long to be paid.