When you need to formally let someone know about a raise, sending a salary increase letter to an employee is an excellent option. You can use the letter to acknowledge their hard work and dedication, while sharing the good news.
There are several reasons why you might need to send out a salary increase letter—your employee might have requested a raise outright, they might have been recently promoted, or you might just be showing appreciation for the value they add to your company.
Whatever the reason, it’s always a good idea to customize the salary increase letter that you send to an employee, and add a personal touch. To give you some inspiration, we’ve shared three samples of salary increase letters in this article.
How do you inform an employee of a raise?
There are different ways to let an employee know that a raise is on the way. You could send them an email, for example, let them know over the phone, or schedule a meeting to tell them in person.
Using a combination of these methods is effective—you can informally let your employee know in a 1:1 meeting, and follow this up with an official email later that contains the specifics.
How do you write a salary increase email?
When you sit down to write a salary increase email, there are a few key points that you should explicitly address,:
The reason for the raise. Let your employee know exactly what their raise is for. Did they perform exceptionally well? Is it in response to a request they made? If you’ve already discussed the raise with them in person or on call, it’s still a good idea to mention the reason in your letter.
The details of their new compensation. To make sure your employees know exactly how the raise will be implemented, consider walking them through the details in your email. Review their existing compensation structure, and let them know if and how things will change. Be sure to explain how their benefits package will be affected, for instance.
3 salary increase letter templates for different scenarios
As we mentioned above, you might give an employee a raise for different reasons. We’re going to share some templates that cover the most common scenarios, but first, here’s the general format that each letter should follow:
Company Information: Include the date, your full name, company address, your work phone number or the company phone number, and your work email address.
Employee Information: Include the employee’s full name, employee’s address, and optionally—their job title and the department they work in.
The Body of the Letter: Include a salutation, the specifics of the salary increase, and sign-off along with your signature.
Any salary increase letter you write should include the personal and contact information that we’ve mentioned in this format. But to keep the templates simple, we’ll only focus on the letter’s body.
1. When your employee asked for a raise
Salary Increase ApprovedDear First Name,
We recently received your request for a salary increase. This letter is to confirm that, upon review, your request has been granted and your salary has been increased from Old Salary to New Salary per year. Your salary increase is effective as of Date and your new pay will appear in your paycheck from Date.
We have reviewed your benefits package, too. The breakdown of your new benefits package is as follows:
{Insert the details of the employee’s new benefits and explain how it differs from their previous package.}
Congratulations on your salary increase—it was well-earned and you deserve it. We are grateful for your loyalty and dedication, and we really appreciate {highlight and acknowledge some of the employee’s specific traits}.
Warm regards,
Your Name
2. When your employee got a promotion
Promotion and Salary IncreaseDear First Name,
This letter is to confirm that you have been promoted to New Role and your annual salary has therefore been increased from Old Salary to New Salary. Your salary increase will take effect from Date and your new pay will appear in your paycheck from Date.
Your benefits package has also been revised. All other conditions of your employment remain unchanged. The breakdown of your new benefits package is as follows:
{Insert details of the employee’s new benefits package.}
Congratulations on your promotion. You have been an integral part of the growth of our Department, and your dedication and commitment have not gone unnoticed. We know you’re going to excel in your new position.
If you have any questions regarding your promotion, please either reach out to me or our HR team.
Best regards,
Your Name3. When you want to appreciate your employee’s hard work
Merit Salary IncreaseDear First Name,
This letter is to confirm that we have been assessing your work closely, and that we have decided to increase your salary from Old Salary to New Salary. Your annual salary increase is effective as of Date and your new pay will appear in your paycheck from Date.
Your benefits package has also been reviewed. The breakdown of your new benefits package is as follows:
{Insert details of the employee’s new benefits package.}
As discussed in our meeting on Day, we're granting this salary increase in appreciation for your continued hard work. You’ve exceeded your departmental goals over Timeframe, and your dedication and commitment have {highlight key ways in which they’ve helped the team progress}.
We’re grateful to have you on the team and we really appreciate the experience and perspective you bring in. We also appreciate how you {insert a specific achievement or success}.
Congratulations on your salary increase—you deserve it. Thank you, too, for your ongoing loyalty.
Best regards,
Your Name
An example of a letter to employee about salary increase
We hope that the templates we’ve shared help you put together a salary increase letter. Here’s how a finished letter might look:
11 May 2023
Claire Park
466 Schamberger Villages Suite 083
1-783-312-5542
claire.park@yourcompany.co
Vanessa Hunt
9530 Koch Plains
Dear Vanessa,
We recently received your request for a salary increase. This letter is to confirm that, upon review, your request has been accepted and your salary has been increased from $70,000 to $95,000 per year. Your salary increase is effective as of 1 June 2023 and your new pay will appear in your paycheck from 1 July 2023.
Congratulations on your salary increase—it was well earned and you deserve it. We are grateful for your hard work and dedication, and especially appreciate the initiative you took on the Kent account. You helped us win some exceptionally valuable business this year and we look forward to succeeding together in the future.
Warm regards,
Claire
Save and customize your salary increase letter templates with Magical
If you write salary increase letters fairly often (#humblebrag), it’s helpful to have some templates to fall back on. Magical’s free text expander lets you save templates and customize your messages whenever you need to and wherever you work.
Just type double slash (“//”) to bring your templates up. Then put the variable fields in (like the employee’s name and their new pay) and let Magical fill out the rest. 🪄 You can add Magical to Chrome for free here.
