diff --git a/app/src/benchmarks/recalc.bench.ts b/app/src/benchmarks/recalc.bench.ts
new file mode 100644
index 0000000..a87a3d9
--- /dev/null
+++ b/app/src/benchmarks/recalc.bench.ts
@@ -0,0 +1,21 @@
+import { bench, describe } from 'vitest';
+import { usePayrollStore } from '../hooks/usePayrollStore';
+
+// setup store
+const store = usePayrollStore.getState();
+store.setActiveYear(2025);
+store.initializeYear(2025);
+
+describe('setTargetNet performance', () => {
+  bench('setTargetNet (month 1) - full recalc', () => {
+    store.setTargetNet(1, 3000);
+  });
+
+  bench('setTargetNet (month 6) - partial recalc', () => {
+    store.setTargetNet(6, 3000);
+  });
+
+  bench('setTargetNet (month 12) - minimal recalc', () => {
+    store.setTargetNet(12, 3000);
+  });
+});
diff --git a/app/src/hooks/usePayrollStore.test.ts b/app/src/hooks/usePayrollStore.test.ts
index f71c8e8..33dca9c 100644
--- a/app/src/hooks/usePayrollStore.test.ts
+++ b/app/src/hooks/usePayrollStore.test.ts
@@ -50,4 +50,40 @@ describe('usePayrollStore', () => {
     // Feb Balance = Jan monthlyBonus + Feb monthlyBonus
     expect(feb.runningBalance).toBeCloseTo(jan.monthlyBonus + feb.monthlyBonus, 1);
   });
+
+  it('should produce identical results with partial recalculation vs full recalculation', () => {
+    const store = usePayrollStore.getState();
+    store.resetData();
+    store.initializeYear(2025);
+
+    // Scenario A: Incremental updates (uses optimized partial recalc)
+    act(() => {
+      store.setTargetNet(1, 3000);
+      store.setTargetNet(6, 4000);
+    });
+
+    const partialLedger = JSON.parse(JSON.stringify(usePayrollStore.getState().years[2025].ledger));
+    const resultingEvents = usePayrollStore.getState().salaryEvents;
+
+    // Scenario B: Full recalculation from scratch
+    act(() => {
+      store.resetData();
+      usePayrollStore.setState({ salaryEvents: resultingEvents });
+      store.initializeYear(2025);
+    });
+
+    const fullLedger = usePayrollStore.getState().years[2025].ledger;
+
+    expect(partialLedger.length).toBe(12);
+    expect(fullLedger.length).toBe(12);
+
+    for (let i = 0; i < 12; i++) {
+      expect(partialLedger[i].targetNet).toBe(fullLedger[i].targetNet);
+      expect(partialLedger[i].grossSalary).toBe(fullLedger[i].grossSalary);
+      expect(partialLedger[i].netSalary).toBe(fullLedger[i].netSalary);
+      expect(partialLedger[i].monthlyBonus).toBe(fullLedger[i].monthlyBonus);
+      expect(partialLedger[i].provisions).toBe(fullLedger[i].provisions);
+      expect(partialLedger[i].runningBalance).toBe(fullLedger[i].runningBalance);
+    }
+  });
 });
diff --git a/app/src/hooks/usePayrollStore.ts b/app/src/hooks/usePayrollStore.ts
index d3f58a0..5e0ac13 100644
--- a/app/src/hooks/usePayrollStore.ts
+++ b/app/src/hooks/usePayrollStore.ts
@@ -235,11 +235,14 @@ const recalcLedgerForYear = (
   yearData: YearData,
   year: number,
   employee: EmployeeInfo,
-  salaryEvents: SalaryEvent[]
+  salaryEvents: SalaryEvent[],
+  fromMonth: number = 1
 ) => {
   const dependents = employee.dependents;
 
   return yearData.ledger.map(entry => {
+    if (entry.month < fromMonth) return entry;
+
     const { isInEmployment, daysWorked, proRataFactor } = computeEmploymentForMonth(
       employee,
       year,
@@ -393,10 +396,20 @@ export const usePayrollStore = create<PayrollState>()(
           const newYears: PayrollState['years'] = {};
           for (const [yKey, yData] of Object.entries(state.years)) {
             const y = Number(yKey);
-            newYears[y] = {
-              ...yData,
-              ledger: recalcLedgerForYear(yData, y, state.employee, salaryEvents),
-            };
+
+            if (y < year) {
+              newYears[y] = yData;
+            } else if (y === year) {
+              newYears[y] = {
+                ...yData,
+                ledger: recalcLedgerForYear(yData, y, state.employee, salaryEvents, month),
+              };
+            } else {
+              newYears[y] = {
+                ...yData,
+                ledger: recalcLedgerForYear(yData, y, state.employee, salaryEvents, 1),
+              };
+            }
           }
 
           return {
@@ -620,13 +633,27 @@ export const usePayrollStore = create<PayrollState>()(
             event,
           ]);
 
+          const [evYearStr, evMonthStr] = event.effectiveMonth.split('-');
+          const evYear = Number(evYearStr);
+          const evMonth = Number(evMonthStr);
+
           const newYears: PayrollState['years'] = {};
           for (const [yKey, yData] of Object.entries(state.years)) {
             const y = Number(yKey);
-            newYears[y] = {
-              ...yData,
-              ledger: recalcLedgerForYear(yData, y, state.employee, salaryEvents),
-            };
+
+            if (y < evYear) {
+              newYears[y] = yData;
+            } else if (y === evYear) {
+              newYears[y] = {
+                ...yData,
+                ledger: recalcLedgerForYear(yData, y, state.employee, salaryEvents, evMonth),
+              };
+            } else {
+              newYears[y] = {
+                ...yData,
+                ledger: recalcLedgerForYear(yData, y, state.employee, salaryEvents, 1),
+              };
+            }
           }
 
           return { salaryEvents, years: newYears };
@@ -636,15 +663,42 @@ export const usePayrollStore = create<PayrollState>()(
 
       removeSalaryEvent: eventId => {
         set(state => {
+          const removedEvent = state.salaryEvents.find(e => e.id === eventId);
           const salaryEvents = sortSalaryEvents(state.salaryEvents.filter(e => e.id !== eventId));
 
+          let evYear = 0;
+          let evMonth = 1;
+
+          if (removedEvent) {
+            const [y, m] = removedEvent.effectiveMonth.split('-');
+            evYear = Number(y);
+            evMonth = Number(m);
+          }
+
           const newYears: PayrollState['years'] = {};
           for (const [yKey, yData] of Object.entries(state.years)) {
             const y = Number(yKey);
-            newYears[y] = {
-              ...yData,
-              ledger: recalcLedgerForYear(yData, y, state.employee, salaryEvents),
-            };
+
+            if (removedEvent) {
+              if (y < evYear) {
+                newYears[y] = yData;
+              } else if (y === evYear) {
+                newYears[y] = {
+                  ...yData,
+                  ledger: recalcLedgerForYear(yData, y, state.employee, salaryEvents, evMonth),
+                };
+              } else {
+                newYears[y] = {
+                  ...yData,
+                  ledger: recalcLedgerForYear(yData, y, state.employee, salaryEvents, 1),
+                };
+              }
+            } else {
+              newYears[y] = {
+                ...yData,
+                ledger: recalcLedgerForYear(yData, y, state.employee, salaryEvents),
+              };
+            }
           }
 
           return { salaryEvents, years: newYears };