How to use the retroactive pay calculator
- Choose whether pay is set as an hourly rate or a yearly salary.
- Enter the old rate and the new rate. For hourly pay, add your regular hours per week and any overtime hours with the multiplier. For salary, pick how often you are paid.
- Enter the date the new rate took effect and the last date to include. Both days count.
- Read the back pay owed before tax, with the steps shown. Copy, print or save it as CSV.
Formula
Hourly: back pay = (new rate - old rate) x weekly hours x weeks, plus (new rate - old rate) x multiplier x overtime hours x weeks
Salary: back pay = (new salary - old salary) x days / 365
Weeks = days covered / 7, with both the first and last day counted
The result is rounded to the cent only at the end. All numbers come from what you enter, so check them against your pay records.
A raise from $22.50 to $24.00 an hour
The raise took effect on July 1, 2026 and is paid through September 30, 2026. That is 92 days or 13.14 weeks. At 40 hours a week the raise is $1.50 x 40 x 13.14 = $788.57.
If the person also worked 5 overtime hours a week at 1.5 times the rate, the extra is $1.50 x 1.5 x 5 x 13.14 = $147.86, for a total of $936.43. For a salary that rose from $60,000 to $70,000 over the same 92 days, the back pay is $10,000 x 92 / 365 = $2,520.55, which is $384.62 per pay period when paid every two weeks.
What retroactive pay is
Retroactive pay, often called back pay or retro pay, is money owed for a period in which a raise should have applied but your paychecks still used the old rate. It happens when a raise is approved after its start date, when a contract is signed late or when a payroll change is processed late. The amount owed is the difference between what you should have earned and what you were paid.
This calculator figures that difference as plain arithmetic. For hourly pay it multiplies the raise per hour by the hours you worked and the weeks covered. For salary it takes the share of the year that the dates cover. Because the pay rate on your stubs may include other items, compare the result with your own records.
What it does not do
The result is before taxes and deductions, and it does not include bonuses, commissions, shift pay, paid time off or benefits that are tied to your pay rate. Employers may calculate back pay by pay period, pay it on a different schedule or follow a contract that works differently. Overtime rules and multipliers depend on your employer, your agreement and the rules that apply to you, so the multiplier in the form is only an example value.
Check with your employer, your contract or the rules that apply to you for the exact amount. To see what a raise means over a year, use the pay raise calculator, to turn rates into yearly pay use the hourly to salary calculator, and for a full paycheck of hours and overtime see the gross pay calculator and the overtime calculator.
Counting the days
Both the first and the last date are counted, so a raise that starts and ends on the same day covers one day. Weeks are days divided by 7, which allows part weeks without needing to know your exact schedule. If you worked fewer hours in some weeks, lower the hours per week, or run the calculator for each period and add the results.
Assumptions and limits
- The new rate must be at least as high as the old rate. The tool is for back pay after a raise.
- Hourly back pay uses the same hours every week, and salary back pay uses days divided by 365.
- Overtime is optional, and the multiplier of 1.5 is an example value you can change.
- Taxes, deductions, benefits and bonuses are not included, and your employer or contract may calculate pay differently.
Frequently asked questions
How do I calculate retroactive pay?
Subtract the old rate from the new rate, then multiply by the hours you worked at the new rate. For hourly pay that is the raise per hour times weekly hours times the number of weeks the raise covers.
Does the result include taxes?
No. It is the gross amount before taxes and deductions. Your take home pay will be lower, and the payroll treatment of back pay can differ.
How is overtime handled?
Enter the overtime hours per week and the multiplier. The raise per hour is multiplied by the multiplier and the overtime hours, and it is added to the regular back pay. The multiplier of 1.5 is an example, so use the one that applies to you.
What if my pay changed more than once?
Run the calculator once for each period with its own old rate, new rate and dates, and add the amounts together.