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Salary Increase Letter Template
A salary increase letter template to confirm a pay raise professionally — covering the new salary, effective date, reason, and a note of appreciation.
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What you get
- Ready-to-send letter copy with merge fields for every variable
- A clear structure: new salary, effective date, and reason
- Wording that ties the raise to performance and contribution
- Optional clauses for promotion, market adjustment, or merit raises
Template preview
A preview of the structure. Download the PDF or CSV for the complete, ready-to-use version.
Letter variables
- Employee name
- Job title
- Current salary
- New salary
Opening
Dear [Employee name], I'm pleased to confirm an increase to your annual salary. In recognition of your strong performance and valued contribution to the team, your compensation will be adjusted effective [Effective date].
Details
Your new annual base salary will be [New salary], an increase of [Increase amount / percentage] from your current salary of [Current salary]. All other terms of your employment remain unchanged. This adjustment reflects a [merit increase / promotion to [Job title] / market adjustment] and will appear in your pay from the next applicable pay period on or after the effective date.
Recognition & close
[Add a specific, genuine note about the employee's recent impact.] Thank you for the energy and commitment you bring. We're glad to have you on the team and look forward to your continued success. Warm regards, [Manager name & title]
Pair the letter with an updated total rewards statement. Seeing the full package — not just the new base number — reinforces the value of the raise and the wider investment in them.
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How to use this template
- 1
Fill the variables
Complete the merge fields with the employee's name, amounts, effective date, and the reason for the increase.
- 2
Choose the right reason
Pick the clause that fits — merit, promotion, or market adjustment — and delete the others.
- 3
Personalise the praise
Add a specific line on the employee's recent contribution so the letter feels genuine, not templated.
- 4
Deliver in a conversation
Hand the letter over in a 1:1, not by email alone, so the recognition lands the way it should.
Frequently asked questions
What should a salary increase letter include?
The new salary, the increase amount or percentage, the effective date, the reason, and a note of appreciation. Confirm that other employment terms are unchanged to avoid any ambiguity.
Should I email or hand over the letter?
Deliver the news in a conversation, then follow up with the written letter as the formal record. A raise communicated only by email can feel transactional and undercut the recognition.
How specific should the reason be?
Specific enough to feel earned. Reference performance, a promotion, or a market adjustment, and add a personalised line about the employee's contribution so it reads as recognition, not paperwork.