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Salary Increment Letter Format — Free Template

A salary increment letter tells an employee their pay has gone up, by how much, and from when. Enter the current and revised CTC and the letter works out the increase for you — or tap "See an example" to check what yours should say.

Sample salary increment letter format — edit it live

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Warm salary increment letter format

The same facts in a friendlier voice, for a small team where a formal letter would feel stiff.

[Company Name]

[Registered office address]

[Date]

To, [Employee Name] [Designation]

Subject: Revision of salary

Dear [Employee Name],

Thank you for everything you have brought to [Company Name]. Following your annual performance appraisal, we are delighted to inform you that your salary has been revised.

Current annual CTC[Current Annual CTC]
Revised annual CTC[Revised Annual CTC]
Increase[Increase]
Effective from[Effective Date]

The component-wise breakup of your revised salary will be shared with you separately.

Your monthly salary, and the tax deducted from it, will be adjusted in payroll from [Effective Date]. All other terms and conditions of your employment remain unchanged.

Your salary details are personal to you, so please keep this letter confidential.

Congratulations, and thank you. We are glad to have you with us and look forward to the year ahead together.

_______________________________

[Name], HR Manager

For and on behalf of [Company Name]

Date: ____________________

_______________________________

[Employee Name]

Received and acknowledged

Date: ____________________

Fill in your details and download this as Word

Salary revision letter for a role change

When the raise comes with a new role. The breakup is attached as an annexure.

[Company Name]

[Registered office address]

[Date]

To, [Employee Name] [Designation]

Subject: Revision of salary

Dear [Employee Name],

In view of the change in your role and responsibilities, now as [Designation], we are pleased to inform you that your salary has been revised.

Current annual CTC[Current Annual CTC]
Revised annual CTC[Revised Annual CTC]
Increase[Increase]
Effective from[Effective Date]

The component-wise breakup of your revised salary is set out in the annexure to this letter.

Your monthly salary, and the tax deducted from it, will be adjusted in payroll from [Effective Date]. All other terms and conditions of your employment remain unchanged.

The contents of this letter are confidential, and we request that you do not share them.

We appreciate your contribution and look forward to your continued association with the Company.

_______________________________

[Name], HR Manager

For and on behalf of [Company Name]

Date: ____________________

_______________________________

[Employee Name]

Received and acknowledged

Date: ____________________

Fill in your details and download this as Word

How to write a salary increment letter

  1. 1

    Choose the tone

    Formal for most companies; warm if your team is small and a formal letter would feel distant. The facts are the same in both.

  2. 2

    Enter both CTC figures

    Take the current annual CTC from payroll and enter the revised one. The letter works out the increase in rupees and as a percentage.

  3. 3

    Set the effective date

    The date the new salary starts. If it is earlier than the letter date, plan how the arrears will be paid.

  4. 4

    Pick the reason

    Annual appraisal, performance, market correction or role change. The opening line changes to match.

  5. 5

    Say where the breakup is

    Attach the revised salary structure as an annexure, or say it will be shared separately.

  6. 6

    Sign, share privately and update payroll

    Sign it on letterhead, give it to the employee one-to-one, and send the new figures to payroll before the next pay run.

Increment letter, promotion letter or appraisal letter?

These three get mixed up because they often arrive on the same day. An increment letter changes pay. A promotion letter changes the role. An appraisal letter records how the review went. One employee can get all three in a single year, or a single letter that does more than one job.

Keep each letter to the job it does. If the person was promoted and got a raise, either issue a promotion letter that also states the new salary, or issue both letters. What matters is that the new designation, the new CTC and the date both take effect are written down somewhere the employee can keep.

Increment letterPromotion letterAppraisal letter
What changesSalary onlyDesignation and responsibilities, usually salary tooNothing by itself; it records the review
Key figuresCurrent CTC, revised CTC, increase, effective dateNew designation, effective date, revised CTC if anyRating or feedback, sometimes the outcome
When issuedAfter the appraisal cycle or a mid-year correctionWhen the new role startsAt the end of the review cycle
Who keeps itThe employee, for loans, visas and the next jobThe employee, for their CV and background checksHR file, and the employee's copy

What an increment letter must state

An increment letter is short, and it should be. The employee reads it for four facts, and payroll acts on two of them. Everything else is courtesy.

Current and revised annual CTC
Both figures, in rupees, as annual cost to company. Stating only the new figure, or only a percentage, leaves room for an argument later about what the old figure was.
The increase, worked out
The difference in rupees and as a percentage of the current CTC. This generator calculates it so the three numbers always agree.
The effective date
The date the new salary starts, which is often not the date of the letter. If it is earlier, say how the arrears will be paid.
Other terms unchanged
One line confirming that everything else in the appointment letter still applies. Without it, an employee could reasonably ask whether notice, leave or role changed too.
Where the breakup is
Say whether the component-wise salary structure is attached as an annexure or will be shared separately. The letter itself does not need to list every component.
Signature and acknowledgement
Signed by someone who can speak for the company, with a line for the employee to sign the office copy as received.

Keep salary letters confidential

Salary is personal information. Hand the letter over one-to-one or send it to the employee's own email, never to a team list or a shared drive. Keep the signed copy in the employee's HR file with restricted access.

Most increment letters ask the employee to keep the contents confidential, and this one does too. Treat that as a polite request rather than a gag: whether you can discipline someone for discussing their own pay depends on your policies and contracts, so check those, or ask your HR or legal adviser, before you rely on it.

If a manager needs to know the new figure to plan budgets, share it with them directly. Do not copy them on the employee's letter.

Got an increment letter? Check these things

Read the letter against your last payslip and your appointment letter before you sign the office copy. Mistakes are easy to fix now and awkward once a few months of payroll have run on the wrong figure.

Your current CTC
It should match the CTC in your appointment letter or last revision, not just your take-home pay.
The revised CTC and the increase
Check the arithmetic. The increase in rupees and the percentage should both follow from the two CTC figures.
The effective date
If it is earlier than the letter date, ask when the arrears will be paid and whether they will show on a separate line of your payslip.
What makes up the new CTC
A higher CTC can come from a larger variable or bonus component rather than fixed pay. Ask for the breakup if it is not attached.
Everything else unchanged
Look for the line confirming your other terms stay the same. If your role also changed, the letter should say so.

What changes in payroll and tax

A revised salary changes the tax your employer deducts each month, because TDS on salary is worked out on the estimated income for the whole financial year. Payroll will usually recalculate it from the month the new salary starts, so the deduction can rise by more than you expect if the increment arrives late in the year.

The exact amount depends on the tax regime the employee has chosen and the investment and allowance declarations they have made, so the letter does not mention a figure, and should not. If the employee has not updated their declarations for the year, the revision is a good prompt to do it.

Employers should also check what else the new CTC touches: contributions calculated on basic pay, any allowance linked to salary bands, and the structure in the annexure. Ask your payroll provider or CA to confirm the new monthly figures before the first revised pay run.

What goes wrong

Most problems with increment letters are small slips that turn into a payroll correction or an unhappy conversation.

Percentage that doesn't match the figures
Someone types 10% and a revised CTC that is actually 9.4% higher. Let the letter calculate it.
No effective date
Payroll guesses, and the employee assumes the earlier of the two possible dates.
Take-home pay quoted as CTC
Mixing gross, net and CTC in one letter makes the increase look bigger or smaller than it is. Use annual CTC throughout.
Promising next year's raise
Do not mention future increments, bonuses or ESOPs unless they are already decided and documented elsewhere.

Covering email when you send the letter

Subject: Your salary revision — [Company Name]

Dear [Employee Name],

Please find attached your salary revision letter. Your revised salary takes effect from [Effective Date].

The breakup of your revised salary is [attached / will follow from the payroll team]. If anything in the letter looks wrong, reply to this email and we will correct it.

Thank you for your work this year.

Regards, [Name] [Title], [Company Name]

Frequently asked questions

What is a salary increment letter?

A letter from the employer telling an employee their salary has been revised upward. It states the current and revised annual CTC, the increase, and the date the new salary takes effect, and confirms that other terms stay the same.

Is an increment letter the same as an appraisal letter?

Not quite. An appraisal letter records the outcome of a performance review; an increment letter records the change in pay. Many companies combine them, which is fine as long as the new CTC and effective date are clearly stated.

Should the letter show the percentage or the amount?

Both, along with the old and new CTC. A percentage on its own invites confusion about which figure it was applied to. This generator works out the amount and the percentage from the two CTC figures.

Can the effective date be earlier than the letter date?

Yes. Increments decided after the appraisal cycle are often effective from the start of the cycle, such as 1 April. In that case the employee is owed arrears for the months in between, and the covering note should say when they will be paid.

Does an increment letter need to be on stamp paper?

No. Issue it on company letterhead, signed by an authorised person. Ask the employee to sign the office copy as received.

Will my TDS change after an increment?

Usually, yes. Your employer recalculates the tax deducted from your salary for the rest of the financial year based on the revised salary. The exact change depends on your tax regime and declarations, so check your next payslip and talk to payroll if it looks off.

Can I share my increment letter with others?

Most letters ask you to keep salary details confidential, and it is sensible to. You will often need to show it to a bank for a loan, to a visa office, or to a future employer as proof of salary, which is normal.

Should the increment letter include the full salary breakup?

It does not have to. Many companies attach the revised structure as an annexure or share it separately. The letter should say which, so the employee knows where to find it.

What if my increment letter has the wrong CTC?

Write to HR with your last revision or appointment letter and a recent payslip, and ask for a corrected letter before you sign the office copy. It is much easier to fix before payroll runs on the new figure.

Is an emailed PDF of the increment letter valid?

In practice, yes. Most companies now send a signed PDF, and electronic records are recognised under the Information Technology Act, 2000. Keep the email it came with.

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