Salary Increment Letter to Employees: Template
Salary Increment Letter to Employees: Template
Many companies distribute salary increments to employees at a given time each year. Some companies do this in a new fiscal year, along with promotions. For each employee whose salary you raise, you must write them a salary increment letter as well.
Why do you need a salary increment letter? The letter is an important document for each employee’s HR file as it has in writing the exact amount of the raise, its basis, and its effectivity date. Use this salary increment letter to formally keep track of changes in salary.
The letter is paperwork and record-keeping, but it can serve other purposes as well. Use the salary increment letter to show your appreciation for employees’ work, or make brief suggestions for the year ahead. In the event of a dispute, the letter proves that you provided clear feedback and appropriate raises in salary, at consistent intervals. These should all be communicated in person, but a letter formalises it and makes it a matter of record.
The letter is typically sent by either the managers or by HR. For the latter, HR can consult with direct supervisors for the specifics of each employee’s letter. You can see both template versions below.
Is the salary increase coming with a promotion as well? Check our guide on writing an internal promotion offer.
Before sending the letter, set a one-on-one meeting with the employee. During this meeting, briefly summarise the reasons for the increment. Be clear about new targets that may be set and get the employee’s agreement. Discuss as well their career path if it is relevant for potential promotions.
This meeting is also important in case the employee has follow-up questions about the increase. In a one-on-one meeting, you can immediately answer these questions and even negotiate the offer. If possible, be open about the salary range for the role. Read more: How to better discuss salaries with employees
Keep your letter brief and positive. Put all the key information in the first paragraph, and end by showing your appreciation for their contributions throughout the year. Attach the updated contract and other relevant documents for the employee to sign as well.
We’ve written two templates for the letter: one from the manager and one from HR. Feel free to customise as you see fit.
A salary increase letter from management
Subject line: Salary increase and updated contract
Hello [Employee name],
This confirms the [__%] salary increase we discussed in our meeting. This raises your annual gross salary from [RM_______] to [RM_______], effective [date]. You’ll see the addition reflected in your [month] paycheck.
Attached is your updated employment contract, also as we discussed. Please read, sign and send it to HR by the end of this week.
As your manager, I’ve seen you grow over the past year, especially in [cite relevant skill or growth point]. I see that you are working hard to improve, and am impressed by your contribution to our department. [Company name] and I appreciate your hard work. Here’s to next year!
[Your name]A salary increase letter from HR
Subject line: Salary increase and updated contract
Hello [Employee name],
This confirms your [__%] raise in salary, as discussed between you and your manager [Manager name]. This raises your annual gross from [RM_____] to [RM______]. Your increase becomes effective on [date], so the addition will be reflected in your [month] paycheck.
This is based on your manager’s evaluation and your good performance throughout the year.
Please visit our office to sign your updated contract by the end of the week.
[Company name] values you and your efforts. Here’s to next year!
[Your name]