NHS Back Pay Explained: How Pay Award Arrears Are Worked Out

NHS pay awards are meant to start on 1 April, but the decision is often announced later in the year. When that happens, your new salary is backdated and the difference for the missing months is paid as a lump sum called back pay or arrears. Here is how to check the figure on your payslip.

How back pay is calculated

For each month the old rate was paid, you are owed the gap between the old and new salary. In simple terms:

1. Work out the difference between your old and new yearly salary.
2. Divide by 12 to get the monthly difference.
3. Multiply by the number of months paid at the old rate.

If you work part time, scale the difference to your hours.

A worked example

For 2026/27 the Agenda for Change award was 3.3%. A Band 5 on the entry point moved from £31,049 to £32,073, a rise of £1,024 a year, or about £85 a month.

If the new rate took effect in September, five months (April to August) would have been paid at the old rate. The back pay would be about 5 x £85, or roughly £427 before tax.

What else is backdated

The salary difference is only part of it. Anything paid as a percentage of your basic pay is also topped up for those months:

• Unsocial hours enhancements
• Overtime
• On-call payments linked to your salary
• High cost area supplement, if it changed

If you worked a lot of unsocial hours or overtime during the arrears period, your back pay will be higher than the simple salary calculation.

Why back pay seems to be taxed so heavily

Back pay is added to one month's pay. Payroll treats that month as if you earn that much every month, so part of it may fall into a higher tax band, and it may also push the month's pay into a higher NHS Pension tier or a higher student loan repayment. That can make the after-tax figure look disappointing.

In most cases the income tax evens out over the tax year, because your tax code spreads your allowance across all twelve months. If you think you have overpaid tax by the end of the year, HMRC will normally correct it automatically or you can ask for a refund.

If you have left or changed jobs

If you left the NHS employer during the arrears period, you are usually still owed back pay for the months you worked there, although some employers require you to claim it. If you changed band or pay point during the arrears period, the calculation needs to use the right salary for each month, so a simple calculator can only give an estimate.

When to query it

Check your payslip for a line labelled arrears or back pay. If it looks wrong, gather your old payslips and ask your payroll team for a breakdown by month. Mistakes are more common for staff who changed hours, moved band or worked across two employers.

How to check your back pay

1. Find your salary before and after the award on the official pay scales.
2. Work out the monthly difference for your hours.
3. Multiply by the number of months paid at the old rate.
4. Add the percentage uplift on any overtime, unsocial hours and on-call payments made at the old rate during those months.

If your payslip shows a different figure, ask payroll for a month-by-month breakdown. They should be able to show exactly how they reached it.

Common questions

Is back pay pensionable? The part that relates to pensionable pay, such as basic salary and unsocial hours, is pensionable. Overtime arrears for full-time staff are not.

Can back pay affect benefits like Universal Credit? It can, because Universal Credit looks at earnings received in each assessment period. A lump of back pay may reduce your award for that month.

Will I get back pay if I am on maternity leave? Yes. Occupational maternity pay that was based on the old salary is recalculated.

What if I worked at two trusts during the year? Each employer pays arrears for the months you worked for them, so you may receive two payments.

Common mistakes to avoid

• Forgetting to check that overtime and unsocial hours were also uplifted.
• Assuming the after-tax amount is wrong when it is caused by a temporary tax or pension tier effect.
• Not claiming back pay from an employer you left during the arrears period.

Estimate your arrears

The back pay calculator estimates the arrears for your band, pay point, hours and the number of months owed, and gives a rough after-tax figure. If you know your exact old salary, you can enter it for a more precise result. To see what the award adds each month from now on, read the pay rise guide.