What Is Outstanding Salary?

Are you curious to know what is outstanding salary? You have come to the right place as I am going to tell you everything about outstanding salary in a very simple explanation. Without further discussion let’s begin to know what is outstanding salary?

In the realm of employment, outstanding salary refers to the wages or compensation owed to an employee by their employer but has not yet been paid. It can occur due to various reasons, such as administrative delays, financial difficulties, or contractual disputes. In this blog post, we will explore the concept of outstanding salary, discuss its implications for both employees and employers, and provide guidance on how to address this issue.

What Is Outstanding Salary?

Outstanding salary, also known as unpaid salary or salary arrears, refers to the amount of money that an employer owes to an employee for work performed during a specific period but has not been paid within the expected timeframe. It includes the regular wages, overtime pay, bonuses, commissions, or any other form of compensation that the employee is entitled to receive.

Causes Of Outstanding Salary:

Several factors can lead to the occurrence of outstanding salary:

  1. Administrative Delays: Delays in payroll processing, errors in documentation, or internal administrative issues within the organization can result in unpaid salaries.
  2. Financial Difficulties: Financial constraints faced by the employer, such as cash flow problems or unexpected financial setbacks, may lead to a delay in paying salaries.
  3. Contractual Disputes: Disagreements or disputes between the employer and employee regarding salary calculations, terms of employment, or contractual obligations can result in unpaid wages.

Implications For Employees:

  1. Financial Hardship: Outstanding salary can create financial difficulties for employees who rely on their wages to meet their daily needs, pay bills, and fulfill financial obligations.
  2. Emotional Stress: The uncertainty and frustration caused by not receiving the expected salary can lead to emotional stress and anxiety for employees.
  3. Legal Rights: Employees have legal rights to receive their rightful compensation for work performed. Non-payment of outstanding salary may be a violation of employment laws and regulations.

Implications For Employers:

  1. Legal Consequences: Failure to pay outstanding salary can lead to legal consequences, including potential lawsuits, penalties, or fines imposed by labor authorities.
  2. Reputation Damage: Non-payment of salaries can tarnish an employer’s reputation and negatively impact employee morale and trust in the organization.

Addressing Outstanding Salary:

If you find yourself facing the issue of outstanding salary, here are some steps you can take:

  1. Communicate with the Employer: Initiate a conversation with your employer to inquire about the status of your unpaid salary. Seek clarification on the reasons for the delay and discuss a feasible timeline for payment.
  2. Document Everything: Maintain a record of all communication, including emails, letters, or any other written correspondence, regarding the outstanding salary. This documentation may be valuable evidence if further action is required.
  3. Seek Legal Advice: If the employer fails to address the outstanding salary issue or if the delay persists unreasonably, consider seeking legal advice from a labor lawyer or relevant authorities to understand your rights and explore available remedies.
  4. Report to Authorities: In some jurisdictions, there are labor departments or agencies responsible for handling employee grievances and ensuring fair treatment. If necessary, file a complaint with the appropriate authority to seek resolution.


Outstanding salary is a significant concern that affects both employees and employers. It is essential for employees to be aware of their rights and take appropriate action to address this issue. Employers must prioritize timely payment of wages to maintain a positive work environment, uphold legal obligations, and preserve their reputation. Clear communication, documentation, and seeking legal guidance can contribute to resolving outstanding salary matters and protecting the rights of employees in the workplace.


What Is Salary And Outstanding Salary?

Outstanding salary is a representative personal account. A representative personal account is a account which belongs to a particular person or a group of persons. Salary outstanding to staff being a person is a representative personal account.

Is Outstanding Salary Deducted From Salary?

Salaries paid is shown on the debit side of the Profit and Loss Account but outstanding salaries (when given in additional information) is shown on the Assets side of the Balance Sheet and is deducted from salaries in the Profit and Loss Account.

What Is Outstanding Salary In Final Account?

If outstanding wages are mentioned in the trial balance, they will be shown at the liabilities side only of the Balance Sheet (accounts appearing in the trial balance are shown only at one place in the final accounts).

Why Is Outstanding Salary Credited?

According to the rules of accounting, the increase in liability is credited, Therefore, the Outstanding salary account will be credited while passing the Journal entry. * Add to the salary on the Debit side of the Profit & Loss Account. * Shown on the liabilities side of BALANCE SHEET.


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