Salary Increment Letter | Format and Sample

salary increment letter

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What is a Salary Increment Letter?

An increment letter or salary increment letter is a formal letter given to the employee informing them that their salary has been increased by a certain percentage/amount. This salary increment letter is given after their successful performance evaluation process. The amount of increase in their salary depends on their overall performance throughout the year.

Providing salary increments is the best motivation tool to increase employees’ motivation. Hence it’s important for both the employee and the organization. Receiving this letter is a movement that most of the employees await for the whole year and rightly so because it is a reward for all their hard work done in a year. Generally, organizations provide increments to the employees once in a year but it depends on the organization to when and how to provide increments.

Things to Include in a Salary Increment Letter:

The following are the basic things that must be present in letter format and salary increment mail:

  • Name & designation of the employee
  • Employee’s previous salary
  • Amount/Percentage of increase in employee’s salary
  • Date & Month from which the new salary will be applicable.
  • Appreciation for the work employee has done
HR

When is a Salary Increment Letter Given?

This letter is given during the annual or quarterly performance evaluation cycle. It is given on the basis of employees’ overall performance. The performance evaluation cycle depends on many factors like the company’s policies, company’s profit, company structure, etc., but it’s not mandatory for an organization to provide increments during the performance evaluation cycle only, the organization can give increment to any individual employee for achieving any specific target.

Salary Increment Letter Format

salary increment letter format

Conclusion

This letter is a result of employees hard work, so you must ensure that it’s a good one. With the above information now you know everything about an increment letter, so you will be able to form a perfect salary increment letter format to make your employee happy and motivated for their work.

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Frequently Asked Questions

Who Decides the Salary Increment?

The salary increment is decided by the manager or head of the department, The increment process is initiated by the HR department, and they ask the HOD about each employee’s performance, and how much increment should be given to them, they decide it on the basis of employees performance and behavior.

Is the Increment Letter Confidential?

Yes, any information regarding the compensation of any employee is very confidential, and it shouldn’t be disclosed with anyone in the organization. Most organization even makes their employee sign a non-discloser agreement for that. So if the employee reveals their increment information to someone, then they will have to face the consequences for that.

What is a Good Increment Percentage?

The average Increment percentage in India is 3% for the employees who meet their goals and employer’s expectations, so technically, a 4-5% increment should be good, but it still feels pretty low. So ideally, people believe that a 7.5% increment is good.

What is a Salary Increment Request Letter?

An increment salary request letter is a salary increment application made by employees to ask their organization for a salary increment. It is written by the employees who thinks that they have worked hard throughout the year, but their organization hasn’t done justice to them by not providing them increment. With the salary increment request letter, the employee have a tool to ask for what they deserve.

Is the Increment Letter and promotion letter the same?

No, the Promotion letter states that employees’ role has been promoted and their salary has been increased as well, sometimes a promotion is given in the role but their salary stays the same. while the increment letter states an increase in employee’s salary while having the same role as before. Both letters do have one thing in common, which is an increment in salary, but they are not the same.

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