Salary Increment Letter Malaysia: Samples, Format & HR Guide

A salary increment letter is an official document issued by an employer to inform an employee about a salary increase. It confirms the new salary amount, effective date, and serves as written proof for payroll and HR records.

For HR teams and employers in Malaysia, issuing a proper salary increment letter helps to:

Formalise salary adjustments
Avoid misunderstanding with employees
Maintain accurate employment documentation
Support employee motivation and retention

This guide explains when to issue a salary increment letter, what to include, and provides ready-to-use samples for Malaysian workplaces.

What Is a Salary Increment Letter?

A salary increment letter (also known as a salary increase letter) is a formal written notice confirming:

The employee’s revised salary
The effective date of the increase
The reason for the increment (if applicable)

It may be issued due to:

Annual salary review
Performance-based increment
Promotion
Market salary adjustment
Retention or internal restructuring

Is a Salary Increment Letter Mandatory in Malaysia?

Under Malaysian labour law, a salary increment letter is not legally mandatory.

However, HR best practice strongly recommends issuing one because it:

Acts as official confirmation of salary changes
Supports payroll accuracy
Protects both employer and employee
Avoids future disputes over salary entitlement

Most companies treat it as a standard HR document.

When Should HR Issue a Salary Increment Letter?

HR should issue the letter:

Before the new salary takes effect, or
Together with the first payroll reflecting the new amount

This ensures employees clearly understand:

How much their salary has changed
When the new salary applies
Whether other employment terms remain unchanged

What to Include in a Salary Increment Letter

A proper salary increment letter should include:

Company Details

Company name
Letterhead (recommended)
Date of issuance

Employee Information

Full name
Job title
Department

Subject Line

Example:

Subject: Salary Increment Notification

Opening Statement

Brief and positive introduction.

Salary Revision Details

Current salary
New salary amount
Increment effective date

Reason for Increment (Optional)

Examples:

Annual performance review
Promotion
Market adjustment

Confirmation Statement

Clarify that all other employment terms remain unchanged.

Authorised Signature

Signed by HR, manager, or authorised representative.

5 Sample Salary Increment Letters (Malaysia)

Below are practical examples HR teams can adapt easily.

Sample 1: Performance-Based Salary Increment

[Company Letterhead]

Date: [Date]

Dear [Employee Name],

We are pleased to inform you that based on your strong performance and consistent contributions, your salary will be revised with effect from [Effective Date].

Your monthly salary will be increased from RM[Old Salary] to RM[New Salary].

All other terms and conditions of your employment remain unchanged.

Thank you for your continued dedication.

Sincerely,

[Name]

[Designation]

Sample 2: Annual Salary Increment Letter

[Company Letterhead]

Date: [Date]

Dear [Employee Name],

Following our annual salary review, we are pleased to confirm an adjustment to your salary.

Your revised monthly salary of RM[New Salary] will take effect from [Effective Date].

We appreciate your contribution and commitment to the company.

Sincerely,

[Name]

[Designation]

Sample 3: Promotion Salary Increment Letter

[Company Letterhead]

Date: [Date]

Dear [Employee Name],

Congratulations on your promotion to the position of [New Job Title].

In line with your new responsibilities, your salary will be revised from RM[Old Salary] to RM[New Salary], effective [Effective Date].

We look forward to your success in this new role.

Sincerely,

[Name]

[Designation]

Sample 4: Market Adjustment Salary Increment

[Company Letterhead]

Date: [Date]

Dear [Employee Name],

As part of our salary benchmarking exercise, your salary has been adjusted to remain competitive with market standards.

Your new monthly salary will be RM[New Salary], effective from [Effective Date].

All other employment terms remain unchanged.

Sincerely,

[Name]

[Designation]

Sample 5: Retention Salary Increment

[Company Letterhead]

Date: [Date]

Dear [Employee Name],

In recognition of your value and continued contribution to the organisation, we are pleased to revise your salary effective [Effective Date].

Your updated monthly salary will be RM [New Salary].

We appreciate your ongoing commitment to the company.

Sincerely,

[Name]

[Designation]

HR Best Practices When Issuing Salary Increment Letters

HR teams should:

Discuss the increment with the employee before issuing the letter
Ensure payroll is updated accurately
Keep a signed copy in the employee’s personal file
Issue the letter on company letterhead
Align the increment with internal salary structure and budget

FAQ

Is a salary increment letter the same as an offer letter?

No. An offer letter is issued before employment begins, while a salary increment letter confirms changes during employment.

Does salary increment require a new employment contract?

No. A new contract is not required unless other employment terms change.

Should employees sign the salary increment letter?

It is not mandatory, but many employers request acknowledgment for record purposes.

Can salary increment be given without appraisal?

Yes. Employers may grant increments for market adjustment, retention, or business reasons.

Is there a minimum salary increment percentage in Malaysia?

No. Malaysian law does not specify a minimum increment amount. It depends on company policy and budget.

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