Salary Increment Letter Template

We created a free salary increment letter template that you can fully customize to align with your company’s compensation policies and tone of voice.

Photo by Ghozi Microstock on Vecteezy

What is a Salary Increment Letter?

A salary increment letter is a formal document issued by an employer to notify an employee of an increase in their salary. It typically includes the new salary amount, the effective date of the change, and a brief note of appreciation for the employee’s performance and contributions.

Salary increment letters are usually issued after performance reviews, promotions, or as a recognition of outstanding work.

What are the Benefits of Using a Salary Increment Letter?

A structured salary increment letter helps promote professionalism, transparency, and trust between the employer and employee. Key benefits include:

• Clear documentation: Clearly states the revised salary and effective date, ensuring no confusion about the change.
• Employee recognition: Formally acknowledges the employee’s contributions and value to the company.
• HR Recordkeeping: Provides official documentation for payroll and internal records.
• Positive engagement: Enhances employee morale and motivation through recognition and clear communication.

What is Included in a Salary Increment Letter?

A standard salary increment letter typically includes the following:

• Company letterhead (if applicable)
• Date of issuance
• Full name of the employee
• Employee’s current position and department
• Statement of the salary increase
• Updated salary amount and the date it takes effect
• Appreciation message for the employee’s work and contributions

Can a Salary Increment be Included in a Promotion Letter?

In most cases, when an employee is promoted, their new salary is outlined directly in the promotion letter. However, some companies choose to issue a separate salary increment letter as an attachment or supporting document for clarity and documentation purposes.