Salary increase letter template

Confirm a raise in writing: new rate, effective date and the reason, in a few warm sentences.

Use it on screen
Salary increase letterLetterAdminDate.Employee name and role.📈
How to use itState the new pay rate or salary, the effective date and why, thank the employee, and keep a signed copy in the personnel file.

Who it is for and when to use it

A raise deserves more than a changed number on a pay stub. A short letter makes it clear and personal.

Some states require written notice of pay rate changes. Check your state’s rules.

11 items. Use it on screen, or print it and fill it in by hand.

Letter

Admin

Starting with the salary increase letter

  1. Decide the raise with the pay calculator.
  2. Tell the employee in person.
  3. Give the letter the same day.
  4. Update payroll in time.
  5. File a copy.

A real-world example

Dear Alex, I am pleased to confirm that your hourly rate will increase from $17.50 to $18.75, effective Monday, April 6. This reflects your work leading the closing team and training two new hires. Thank you for everything you do.

Why keep a salary increase letter

A dated letter with the old rate, new rate and effective date gives payroll one clear source for the change and gives the employee proof if a check is wrong. The FLSA requires employers to keep records of each employee’s regular rate, so the letter also fills in that file.

Filled-in sample

Date March 20
Employee and role Keisha, assistant store manager
Current pay $21.00 per hour
New pay $22.50 per hour
Effective date Sunday, April 5
Reason Promotion to key holder with opening and closing duties
Signed Owen, store manager

Sample for Northside Hardware in Omaha, Nebraska. Both rates are given per hour so Keisha can check her first new pay stub, and the reason names the new key holder duties so the raise is clearly tied to a role change.

Where a salary increase letter goes wrong

Variations for different teams

Hourly teams with step payState which step the employee moved to and the hours or months needed for the next one.
Commission or tip earnersMake clear which part of pay changed, such as the base rate, so nobody assumes commission rates moved too.
From the fieldShow the new rate both hourly and as an estimated annual figure for full-time staff. Many people think about pay in yearly terms and appreciate seeing it.

What people ask about the salary increase letter

Is a letter required?

Some states require written notice of pay changes.

Should I explain the reason?

Yes, it makes the raise meaningful.

When is the raise effective?

On the date stated; align it with a pay period.

Is this a contract?

Generally no; it documents a change.

Do I have to give a raise letter to every employee during an annual pay increase?

Not under federal law, but several states require written notice when a pay rate changes, and a short letter to each person covers it. A mail-merged letter showing each person’s own old and new rate is fine.

Should a raise letter mention the new overtime rate?

For hourly employees it helps to state that overtime will be paid at one and a half times the new rate from the effective date. That avoids confusion when the first check after the raise includes overtime hours.

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Related reading

Paperless forms and e-signatures

EZTime’s digital HR forms collect e-signatures and keep the signed copy in the employee’s digital file, with reminders before a document expires. Book a demo if you want a walkthrough.

Disclaimer: This template is general information, not legal advice. Employment rules differ by state and city and change over time. Have a qualified employment attorney or HR professional review it before you use it.