How to Write a Salary Increase Letter to an Employee

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,:

1. 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.
   
2. 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

2. When your employee got a promotion

3. When you want to appreciate your employee’s hard work

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:

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11 May 2023

Claire Park

466 Schamberger Villages Suite 083

1-783-312-5542

claire.park@yourcompany.co

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Vanessa Hunt

9530 Koch Plains

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Dear Vanessa,

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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.

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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.

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Warm regards,

Claire 

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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.