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Salary Increase Letter
Clearly communicate compensation adjustments using this Salary Increase Letter Template.
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Salary Increase Letter
This Salary Increase Letter ("Agreement") is issued on [Date], by:
Employer: [Company Name]
Address: [Company Address]
To: [Employee’s Full Name]
Position: [Employee’s Job Title]
Department: [Department Name]
1. Purpose
This Agreement serves as a formal notification and confirmation of an adjustment to your base salary.
2. Effective Date
The salary increase shall take effect on [Effective Date] and apply to all payroll periods beginning on or after this date.
3. New Compensation
Your new base salary will be:
Gross annual salary: $[New Annual Amount]
Gross monthly salary: $[New Monthly Amount]
This increase reflects a change from your current salary of $[Previous Annual Amount].
4. Reason for Adjustment
The salary adjustment has been made based on [select one or more: performance evaluation, market review, change in responsibilities, promotion, length of service, etc.].
5. Other Terms of Employment
All other terms and conditions of your employment remain unchanged and in full effect unless otherwise specified in a separate written agreement.
6. Acknowledgement
By signing below, you acknowledge receipt of this Salary Increase Letter and confirm your understanding of the new compensation terms.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date written above.
Employee Signature
Name:
Date:
Employer Representative Signature
Name:
Title:
Date:
Details
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Salary Increase Letter
SALARY INCREASE LETTER FAQ
What is a Salary Increase Letter?
A salary increase letter is a formal written communication from an employer to an employee notifying them of a raise in their salary. It specifies the new compensation amount, the effective date of the adjustment, and may also include the reason for the increase, such as exceptional performance, market adjustments, or a promotion. This letter serves both as an acknowledgment of the employee’s value to the organization and as an official record of the change in pay.
Why do you need a Salary Increase Letter?
You need a salary increase letter to provide clear, documented confirmation of any change in an employee’s pay. It ensures that both employer and employee have a mutual understanding of the new compensation terms and the date the change takes effect. It also demonstrates professionalism, maintains transparency, and can be an important part of the employee’s HR file for reference during future evaluations or audits.
When should you use a Salary Increase Letter?
Use a salary increase letter whenever you adjust an employee’s salary, whether due to a promotion, performance-based raise, cost-of-living increase, or retention incentive. Issuing the letter before or on the effective date of the increase helps avoid confusion and ensures that payroll changes are properly implemented.
How to write a Salary Increase Letter?
When writing a salary increase letter, begin by addressing the employee by name and expressing appreciation for their contributions. Clearly state the new salary amount, whether it is presented as an annual figure, hourly rate, or other pay format. Include the effective date of the change and briefly explain the reason for the increase. If the raise is tied to new responsibilities or a promotion, outline those changes as well. Close with a positive note reinforcing the employee’s value to the company, and sign the letter for official validation.
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