Using a level 2 three-dimensional turbulent closure model, the physical processes affecting the upper-ocean salinity budget in the Arabian Sea have been studied with particular focus on the seasonal variability of the Arabian Sea High-Salinity Water (ASHSW). The volume integrated salt budget terms for four subdomains in the Arabian Sea (south of 10.5¿N, north of 10.5¿N, east of 62.5¿E, and west of 62.5¿E) shows a clear balance between the horizontal advection and evaporative freshwater loss in the annual mean. The horizontal advection dominates the seasonal cycle in salinity. The seasonal balance is clear, when the terms of the salt budget are integrated between 10.5¿N and 2.5¿N and east of 62.5¿E. In these subdomains the two major episodes of horizontal advection during winter and summer are both associated with the seasonal reversal of the Arabian Sea circulation. Model estimation of the upper-ocean salinity budget terms integrated between the surface and 100 m for the winter and summer monsoons agree with a qualitative description of the ASHSW variability. After formation in the northern Arabian Sea during the winter monsoon, the ASHSW spreads predominantly southward along the eastern boundary during the summer monsoon. Advection causes salinity to increase by 1.0 kg m-2 day-1 along these regions. At this time, the poleward advection of low-salinity water from the south (and upwelling regions) by the Somali current causes the salinity along the western Arabian Sea to decrease by 0.6 kg m-2 day-1. During the winter monsoon, westward advection of the fresher Bay of Bengal water by the North Equatorial current (NEC) causes a salinity decrease by ~1.0 kg m-2 day-1 in the region south of 10.5¿N. The combined effect of precipitation and evaporation tends to increase the salinity in the Arabian Sea, and horizontal advection is found to be important for maintaining the observed seasonal cycle.