How to Write a Pay Increase Letter + Template

A handshake may have been good enough in the old days, but it’s become standard practice to document salary changes in black and white.

Pay increase letters are an opportunity to outline new job responsibilities and notify employees of salary changes. They also give employees the certainty that their salary increase will be implemented as discussed and can be used by HR and managers as a reference when determining future salary increases.

There are a few situations where you might need to write a salary raise letter, so we’ve created a pay increase letter template for the most common ones. Just copy them here for free, no strings attached.

Pay Increase Letter Templates

Below are five salary increase letter templates you can use. These letters go by many names, but you can feel confident that whether you say salary increase, pay raise, or some combination of the two, all are equally polite ways of saying salary increase.

You’ll just want to be sure to customize the details of the sample letter to match your circumstances for the raise.

The letter format is the same whether you send it formally or via email, but if you’re going to print it out, you’ll want to add to the top:

Your company letterhead
Date
Subject line

Now let’s get to the templates.

General Salary Raise Letter

Sample

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Dear [Employee],

We’ve reviewed your performance from the past year as [Job Title] and are delighted to say we’ve increased your annual salary from [amount] to [amount].

Your salary increase is effective [date] and will appear in your paycheck starting [date].

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We are impressed with your strong work ethic, business achievements, and handling of client relationships. Because of your professionalism and communication skills, we closed several important contracts that helped our company meet its yearly goals.

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Congratulations on your accomplishments and well-deserved pay increase. We look forward to continuing to work with you and seeing your professional growth over the next year.

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Best regards,

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[Your name]

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Promotion

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Dear [Employee],

Congratulations on your promotion! We’re excited to see you move from account manager to senior account manager, reporting to [Supervisor Name]. This past year you’ve consistently surpassed your insurance sales quota, upsold extra coverages, and ensured clients were happy with their claims process.

This letter confirms the salary increase discussed during your most recent performance review. Your salary will increase from [amount] to [amount] per year, and your commission rate will change from [X%] to [X%].

As part of your new role as a senior account manager, your additional essential job duties will consist of:

Managing policy expirations and renewals for our most complex accounts
Providing excellent service to our most important clients
Developing and implementing a comprehensive client service plan for assigned accounts
Independently preparing marketing materials for VIP clients
Mentoring and aiding junior account managers in their success

We look forward to seeing your contributions over the next year and are confident you will be an excellent addition to our senior management team.

Congratulations again on your hard-earned promotion!

Best regards,

[Your name]

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Approving a Raise Request

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Dear [Employee],

Thank you for submitting your pay raise request letter to us on [date]. We’ve reviewed and discussed it with your supervisor and are delighted to approve your request!

We’re happy to increase your compensation to reflect your additional experience and recent achievements, including selling one of our highest insurance policies to date.

As per your request, we’re increasing your pay from [amount] per year to [amount] per year, effective [date].

Congratulations on your well-deserved raise!

Best regards,

[Your name]

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Denying a Raise

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Dear [Employee],

Thank you for submitting your pay raise request letter to us on [date]. We’ve reviewed and discussed the matter with your supervisor. After heavy consideration, we’re sorry to inform you that we’re denying your request for the time being.

We understand this is different from what you were hoping for. We’d like to schedule a meeting to create an action plan for the goals we’d like to see you reach before approving your raise. We’ll also pair you with one of our senior members so you can feel confident in getting the support you need to succeed.

We can revisit the subject during your next performance review in [month].

We’re sorry, again, we couldn’t approve your request. We appreciate your understanding.

Best regards,

[Your name]

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Cost of Living Adjustment

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Dear [Employee],

We’re happy to inform you that we’re increasing your base salary from [amount] to [amount] per year starting [date].

Our nation is experiencing one of the highest inflation levels seen in recent years. We know this can make it difficult to afford the same lifestyle on the same salary, all the while working just as hard.

We value your efforts and feel it is our duty to ensure your salary continues to reflect your experience and dedication. Because of this, we’re raising your salary by [X%] to better meet the cost of living change.

We thank you for your continued professional excellence.

Best regards,

[Your name]

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How to Write Your Own Pay Raise Email or Letter

You can quickly put together a letter by including these essential elements:

Basic information

Start your letter off by including at the top:

Your company information
The current date
“Re: Pay increase” as the letter’s subject.

Introduction

After addressing the employee, here’s your first paragraph broken down by sentence:

One or two sentences detailing their current salary, new salary, and when the raise takes effect. You can also list their new job title if applicable.
One sentence congratulating the employee on their raise.

Body

Next, you’ll want to write one to two short paragraphs explaining why you granted the raise. The goal is to let the employee know what they are doing well and to list any additional responsibilities that come with the pay bump.

Conclusion

Here you’ll spend one sentence congratulating them again on the raise and another thanking them for their hard work and professional excellence. You can also include who to contact if they have questions about the pay rate increase.

Closure

Sign and print your name to finish off the letter.

Write Your Pay Raise Letter Today

Salary raise letters are an important document for businesses to send. They not only formally let employees know of their pay increase, but also create a paper trail for the human resources department and list additional duties.

Now that you know all there is to know about pay increase letters, all that’s left to do? Use our editable templates to send a letter today!

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Remembering Shay Litvak Our Co-Founder and CTO

How to Write a Pay Increase Letter + Template

Lorraine Roberte

Pay Increase Letter Templates

General Salary Raise Letter

Promotion

Approving a Raise Request

Denying a Raise

Cost of Living Adjustment

How to Write Your Own Pay Raise Email or Letter

Basic information

Introduction

Body

Conclusion

Closure

Write Your Pay Raise Letter Today

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