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Writing a Salary Increase Letter: Sample Format

written by: •edited by: Michele McDonough•updated: 4/9/2011

When it’s time to offer a raise to an employee or honor their request for a salary increase, it can be hard to come up with the right phrases and terminology. Here, HR expert Jean Scheid offers up two sample salary increase letters you can use for either circumstance.

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    Raises and Request for Raises

    Salary Increases For employees who perform above par, there are times when managers and business owners want to reward that hard effort with a salary increase. Other times, the HR department or supervisor will receive a verbal or written request for a raise.

    Most companies that offer up a company-wide cost of living adjustment (COLA) include short memos or a mention of the COLA increase in an employee break room or via company newsletter.

    For times when raises are offered based on merit and raises requested by employees, it’s best to use a formal letter. Here, I’ll provide two samples of a salary increase letter you can download from our Media Gallery and modify to your company’s needs.

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    Letter Granting Request for a Raise

    If an employee requests a salary increase (written or verbal), download the sample salary increase letter for a requested raise from our Media Gallery.

    This Microsoft Word document is easily modified and should be placed on company letterhead.

    It’s important that you include certain elements such as:

    • Employee number
    • Amount of raise requested
    • Positions held
    • Current position
    • Amount of raise offered
    • Date increase will go into effect
    • HR contact

    The original letter should be offered to the employee and a copy should be submitted to the personnel file of the employee.

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    Standard Salary Increase Letter

    If an employee will receive a raise based on an annual evaluation or as a merit increase, download the sample salary increase letter from our Media Gallery.

    Also in Microsoft Word form, the letter is easily modified to fit your company’s needs.

    In this standard salary increase letter, you can choose whether the raise in wages is based on an annual performance review or if the increase is a merit raise. These types of annual or merit raises are great venues to include suggestions for employee advancement by taking advantage of continuing education assistance programs or other benefits the employee may be eligible for.

    As with the first salary increase letter, you should include the following:

    • Employee number
    • Amount/percentage of raise increase
    • Positions held
    • Current position
    • Date increase will begin
    • Benefits contact
    • HR contact

    Again, ensure the employee receives the original letter and a copy is placed in their personnel file.

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    Tips on Salary Increases

    Requests for Raises Whether you are granting a request for a raise or offering a salary increase based on employee performance or merits, it’s important to engage in discussions with company owners or supervisors on what the organization can afford.

    Often times, companies will grant or offer raises and find later on the wage level was too high (or even too low). Organizations should review salary expenses within each department to determine if the revenues will be able to maintain the salary increase.

    Most employees will be happy with any amount of salary increase; however, there may be those who feel the raise is too small. In cases such as these, have an HR representative or supervisor meet with the employee to aid them in understanding how the amount was determined.

    These sample salary increase letters are a great tool to download and keep handy when it’s time for employee raises—whether they are annually-based, requested or a merit raise.

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    References

    The author holds a degree in Human Resource Management.

    Image Credits:

    Money - MorgueFile/alvinmann

    Work Station - MorgueFile/Cohdra