Pay or salary increase notification letter
If a decision has been made to increase an employee's pay or salary, issue this model notification letter template to inform the reason and effective date.
Issuing this letter also maintains good communication and trust, and it will also ensure that should there be any disagreement, there is a clear paper trail.
10 mins
202
What is a Pay or salary increase notification letter?
A pay / salary increase notification letter informs employees about a salary or wage increase, including the new rate and effective date. It may mention any affected benefits or bonuses and outline expectations, like performance goals.
These letters facilitate clear communication and show employee appreciation.
In-person meetings with managers before receiving the letter are good practice to maintain a positive working relationship and ensure clear understanding of terms.
After a meeting (where applicable), but as soon as possible before the date of change
The Employer (you) to the Employee
Great Britain & NI (United Kingdom), Worldwide
How can I ensure that this letteris executed effectively?
This step-by-step process ensures that the pay or salary increase is well-justified, consistent with the company's budget, and delivered to the employee in a professional and transparent manner through the notification letter.
| Step | Description | Responsibility | Timing (Days from Issue) |
| 1 | Performance Evaluation: Conduct a thorough performance evaluation of the employee to assess their contributions and achievements. | HR / Management | Day -21 to Day -14 |
| 2 | Budget Review: Review the company's financial status and budget to ensure that a pay or salary increase is feasible and justified. | Finance / Management | Day -14 to Day -7 |
| 3 | Determine Increase Amount: Based on the performance evaluation and budget review, determine the appropriate pay or salary increase amount for the employee. | HR / Management | Day -7 to Day -3 |
| 4 | Prepare Notification Letter: Create a comprehensive Pay or Salary Increase Notification Letter template. Include the employee's current and new salary, effective date, and a personalised message highlighting their contributions. | HR / Management | Day 0 |
| 5 | Issue the Notification Letter: Schedule a meeting with the employee to deliver the news in person and provide them with the Pay or Salary Increase Notification Letter, officially informing them of the pay or salary increase. | HR / Management | Day 1 - Day 3 |
What legislation and best practice guidelines have been taken into account in the development of this template?
When issuing pay increase notification letter, there are certain legal considerations to keep in mind:
-
Comply with employment laws: The letter should comply with all applicable employment laws and regulations, including those related to minimum wage, overtime pay, and discrimination. Make sure that the pay increase is consistent with the employee's job classification, experience, and performance, when compared to other employees undertaking similar tasks.
-
Follow company policies: Ensure that the pay increase is consistent with company policies and procedures, including those related to performance reviews, promotions, and salary scales. If there is a collective bargaining agreement or employment contract in place, make sure that the pay increase complies with the terms of those agreements.
-
Be clear and concise: The letter should be clear and concise, outlining the details of the pay increase, including the amount of the increase, the effective date, and any conditions or expectations that may be associated with the increase.
-
Document the decision: Keep a record of the decision to provide a pay increase, including the reasons for the increase and any supporting documentation such as performance evaluations or salary surveys.
-
Maintain confidentiality: Ensure that the pay increase notification is kept confidential and only shared with those who need to know, such as the employee's immediate supervisor and the human resources department.
-
Avoid promises: Avoid making promises that the company may not be able to keep, such as promises of future pay increases or promotions. Be transparent and honest about the reasons for the pay increase and the company's expectations for the employee going forward.
By considering these legal considerations when writing a pay increase notification letter, you can ensure that the letter is compliant with relevant laws and regulations and accurately reflects the company's policies and expectations.
Other territories
Consult your jurisdiction's employment legislation or labor laws to ensure compliance with the template. Review the language for local precision.
In which communication or process sequence does this template belong?
Pay or salary payment arrangements policy
This model policy template provides information regarding pay or salary payment arrangements.
