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Increment Budget Sheet

An increment budget sheet plans and tracks the total money available for salary increases in a cycle, split by department and by merit, promotion and market-correction pools. Finance and HR prepare it before the appraisal cycle and update it as managers submit proposals.

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[Company Logo][Company Name]

INCREMENT BUDGET SHEET

Company:: [Company Name]
Cycle:: [FY 20XX–XX]
Version:: [v1.0] dated [DD/MM/YYYY]
Owner:: [HR Name]

A. Pool Summary

Pool	Basis	% of Eligible Payroll	Amount (₹ p.a.)
Merit Increment Pool	Rating-based increments	[x]%	[Amount]
Promotion Pool	Promotion increases	[x]%	[Amount]
Market Correction Pool	Below-band and retention cases	[x]%	[Amount]
Central Contingency	Held by HR Head	[x]%	[Amount]
Total Approved Budget		[x]%	[Amount]

B. Department Allocation and Utilisation

Department	Eligible HC	Eligible Payroll (₹)	Allocated (₹)	Utilised (₹)	Balance (₹)	Utilisation %
[Department]	[No.]	[Amount]	[Amount]	[Amount]	[Amount]	[x]%
[Department]	[No.]	[Amount]	[Amount]	[Amount]	[Amount]	[x]%
[Department]	[No.]	[Amount]	[Amount]	[Amount]	[Amount]	[x]%
[Department]	[No.]	[Amount]	[Amount]	[Amount]	[Amount]	[x]%
Total	[No.]	[Amount]	[Amount]	[Amount]	[Amount]	[x]%

C. Total Cost Impact

Cost Head	Annual Impact (₹)	Remarks
Increase in fixed CTC	[Amount]	From section B
Employer PF on revised basic	[Amount]	12% of basic, subject to wage ceiling rules
Employer ESI (where applicable)	[Amount]	3.25% of gross for covered employees
Gratuity provision impact	[Amount]	As per actuarial / finance estimate
Arrears for back-dated increments	[Amount]	One-time

D. Assumptions

Eligible employees are those on rolls as of [DD/MM/YYYY] and not serving notice.
Budget is calculated on fixed CTC; variable pay is budgeted separately.
Unused department balances return to the central pool at the end of the cycle.

Prepared by
[HR Name]
Date: [Date]

Reviewed by
[Finance Head]
Date: [Date]

Approved by
[Authorised Signatory]
Date: [Date]

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What this template includes

Eligible payroll base for each department
Separate merit, promotion and correction pools so one does not eat into another
Allocated versus utilised amounts with variance
Annualised cost including employer PF and gratuity provision impact
Contingency reserve held centrally
Approval and version control fields

When to use it

Getting management approval for the total increment pool for the year
Allocating the approved pool across departments and business units
Tracking how much of each department's budget has been used during the cycle
Reporting the final cost impact of increments to finance

How to customise this template

1List your actual departments, business units or locations
2Set the pool percentages approved by management
3Add employer-cost loading for PF, ESI and gratuity used by your finance team
4Add a column for headcount growth if new hires share the same budget
5Update the utilised column weekly during the cycle

HR tips

Hold a small central reserve for exceptional cases and retention
Count only eligible employees in the payroll base
Include the full cost to company, not just the gross increase
Freeze the sheet version once final letters are issued

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Frequently asked questions

How do companies decide the increment budget?+

They usually consider business performance, market salary movement, inflation, attrition and affordability, then approve a percentage of eligible payroll as the total pool.

Should promotion increases come from the same budget?+

It is better to keep a separate promotion pool so that merit increments for other employees are not reduced when several people are promoted.

What is eligible payroll?+

It is the total fixed salary of employees who qualify for the cycle, usually excluding recent joiners, people serving notice and those not eligible under policy.

All 50 increment, promotion & career →

[Company Logo][Company Name]

INCREMENT CALCULATION SHEET

Company:: [Company Name]
Appraisal Cycle:: [FY 20XX–XX]
Effective Date:: [DD/MM/YYYY]
Prepared by:: [HR Name]

Part 1 – CTC Revision Summary

Emp ID	Employee Name	Grade	Rating	Current CTC (₹)	Increment %	Increase (₹)	New CTC (₹)
[Employee ID]	[Employee Name]	[Grade]	[Rating]	[Amount]	[x]%	[Amount]	[Amount]
[Employee ID]	[Employee Name]	[Grade]	[Rating]	[Amount]	[x]%	[Amount]	[Amount]
[Employee ID]	[Employee Name]	[Grade]	[Rating]	[Amount]	[x]%	[Amount]	[Amount]
[Employee ID]	[Employee Name]	[Grade]	[Rating]	[Amount]	[x]%	[Amount]	[Amount]

Part 2 – Revised Monthly Structure

Emp ID	New Basic (₹)	New HRA (₹)	Special Allowance (₹)	Monthly Gross (₹)	Employer PF (₹)	ESI Applicable (Y/N)	Est. In-hand (₹)
[Employee ID]	[Amount]	[Amount]	[Amount]	[Amount]	[Amount]	[Y/N]	[Amount]
[Employee ID]	[Amount]	[Amount]	[Amount]	[Amount]	[Amount]	[Y/N]	[Amount]
[Employee ID]	[Amount]	[Amount]	[Amount]	[Amount]	[Amount]	[Y/N]	[Amount]

Part 3 – Arrears Computation

Template · Word

Increment Calculation Sheet

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[Company Logo][Company Name]

SALARY INCREMENT LETTER

Ref. No.:: [Reference Number]
Date:: [Date]

To,
[Employee Name]
Employee ID: [Employee ID]
[Designation], [Department]
[Work Location]

Subject: Increment in Salary

Dear [Employee Name],
Congratulations! In recognition of [Reason – e.g. your successful confirmation / completion of the Certification Name certification / your contribution to Project Name], we are happy to grant you an increment in your salary.

Particulars	Details
Current Gross Monthly Salary	₹[Amount]
Increment Amount (per month)	₹[Amount]
Increment Percentage	[Percentage]%
Revised Gross Monthly Salary	₹[Amount]
Revised Annual CTC	₹[CTC]
Effective From	[Effective Date]

The increment will be distributed across your salary components as per company policy, and a revised salary breakup is available from HR on request. Statutory contributions such as PF will be adjusted in line with the revised Basic.

Letter · Word

Salary Increment Letter

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[Company Logo][Company Name]

INCREMENT RECOMMENDATION FORM

Company:: [Company Name]
Increment Cycle:: [YYYY–YY]
Effective Date:: [DD/MM/YYYY]
Department:: [Department]

Merit Increase Guideline

Final Rating	Compa-ratio below 0.90	Compa-ratio 0.90–1.10	Compa-ratio above 1.10
5 – Outstanding	[%–%]	[%–%]	[%–%]
4 – Exceeds	[%–%]	[%–%]	[%–%]
3 – Meets	[%–%]	[%–%]	[%–%]
2 – Needs Improvement	[%–%]	[%–%]	[%–%]
1 – Unsatisfactory	Nil	Nil	Nil

Recommendations

Emp. ID	Employee Name	Designation	Final Rating	Current CTC (₹)	Compa-ratio	Recommended %	Increment (₹)	Revised CTC (₹)	Remarks
[Employee ID]	[Employee Name]	[Designation]	[Rating]	[CTC]	[Ratio]	[%]	[Amount]	[CTC]	[Remarks]
[Employee ID]	[Employee Name]	[Designation]	[Rating]	[CTC]	[Ratio]	[%]	[Amount]	[CTC]	[Remarks]
[Employee ID]	[Employee Name]	[Designation]	[Rating]	[CTC]	[Ratio]	[%]	[Amount]	[CTC]	[Remarks]
[Employee ID]	[Employee Name]	[Designation]	[Rating]	[CTC]	[Ratio]	[%]	[Amount]	[CTC]	[Remarks]

Deviations from Guideline

Form · Word

Increment Recommendation Form

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[Company Logo][Company Name]

INCREMENT APPROVAL FORM

Form No.:: [Reference Number]
Appraisal Cycle:: [FY 20XX–XX]
Date:: [Date]

A. Employee Details

Employee Name	[Employee Name]
Employee ID	[Employee ID]
Designation	[Designation]
Department	[Department]
Grade / Band	[Grade]
Date of Joining	[Date of Joining]
Work Location	[Work Location]
Reporting Manager	[Reporting Manager]

B. Increment Proposal

Particulars	Current (₹ p.a.)	Proposed (₹ p.a.)	Change (%)
Basic Salary	[Amount]	[Amount]	[x]%
HRA	[Amount]	[Amount]	[x]%
Special Allowance	[Amount]	[Amount]	[x]%
Employer PF Contribution	[Amount]	[Amount]	[x]%
Total CTC	[CTC]	[Amount]	[x]%

Type of Increment: Annual Merit / Off-cycle / Market Correction / Special
Performance Rating	[Rating]
Effective Date	[DD/MM/YYYY]
Arrears Payable: Yes / No – Amount ₹ [Amount]
Position in Salary Band after Increment: Below Min / Within / Above Max

Form · Word

Increment Approval Form

Download .docx

[Company Logo][Company Name]

INCREMENT MATRIX

Company:: [Company Name]
Applicable Cycle:: [FY 20XX–XX]
Effective Date:: [DD/MM/YYYY]
Approved Budget:: [x]% of eligible payroll

1. Merit Increase Grid (% of Fixed CTC)

Performance Rating	Compa-ratio below 0.85	Compa-ratio 0.85–0.95	Compa-ratio 0.95–1.05	Compa-ratio 1.05–1.15	Compa-ratio above 1.15
5 – Outstanding	[x–y]%	[x–y]%	[x–y]%	[x–y]%	[x–y]%
4 – Exceeds Expectations	[x–y]%	[x–y]%	[x–y]%	[x–y]%	[x–y]%
3 – Meets Expectations	[x–y]%	[x–y]%	[x–y]%	[x–y]%	[x–y]%
2 – Partly Meets	[x–y]%	[x–y]%	[x–y]%	[x–y]%	[x–y]%
1 – Below Expectations	Nil	Nil	Nil	Nil	Nil

2. Definitions

Compa-ratio = current fixed CTC ÷ midpoint of the employee's salary band.
Fixed CTC excludes variable pay, bonus and one-time payments.
Rating = final calibrated rating approved by the appraisal committee.

3. Application Rules

Template · Word

Increment Matrix

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[Company Logo][Company Name]

ANNUAL INCREMENT PLANNER

Company:: [Company Name]
Cycle:: [FY 20XX–XX]
Increment Effective Date:: [DD/MM/YYYY]
Cycle Owner:: [HR Name]

Cycle Timeline

Phase	Activity	Owner	Start	End	Output	Status
1. Preparation	Freeze employee master data and eligibility list	HR Operations	[DD/MM/YYYY]	[DD/MM/YYYY]	Eligibility list	[Status]
1. Preparation	Market salary review and budget proposal	Comp & Ben / Finance	[DD/MM/YYYY]	[DD/MM/YYYY]	Budget note	[Status]
2. Approval	Management approves budget and increment matrix	[Authorised Signatory]	[DD/MM/YYYY]	[DD/MM/YYYY]	Approved matrix	[Status]
3. Appraisal	Self-appraisal and manager review	Employees / Managers	[DD/MM/YYYY]	[DD/MM/YYYY]	Draft ratings	[Status]
3. Appraisal	Calibration meetings by department	HRBP / Dept Heads	[DD/MM/YYYY]	[DD/MM/YYYY]	Final ratings	[Status]
4. Proposals	Managers enter increment and promotion proposals	Managers	[DD/MM/YYYY]	[DD/MM/YYYY]	Proposal sheet	[Status]
4. Proposals	HR and finance budget check	HR / Finance	[DD/MM/YYYY]	[DD/MM/YYYY]	Approved list	[Status]
5. Release	Manager conversations with employees	Managers	[DD/MM/YYYY]	[DD/MM/YYYY]	Discussion done	[Status]
5. Release	Increment and promotion letters issued	HR	[DD/MM/YYYY]	[DD/MM/YYYY]	Letters	[Status]
6. Payroll	Revised salary and arrears processed	Payroll	[DD/MM/YYYY]	[DD/MM/YYYY]	Revised payslips	[Status]

Communication Plan

Cycle launch email to all employees with key dates.
Manager briefing on rating guidelines and the increment matrix.
Reminder emails three working days before each deadline.
Grievance window of [x] working days after letters are issued.

Post-cycle Review

Plan · Word

Annual Increment Planner

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[Company Logo][Company Name]

COMPENSATION BENCHMARKING SHEET

Company:: [Company Name]
Data Sources:: [Survey / Source Names]
Data Effective Date:: [DD/MM/YYYY]
Target Market Position:: [P50 / P60 / P75]

A. Role Matching

Internal Role	Grade	Survey Role / Code	Match Quality	City	Incumbents
[Designation]	[Grade]	[Survey Role]	Strong / Moderate / Weak	[City]	[No.]
[Designation]	[Grade]	[Survey Role]	Strong / Moderate / Weak	[City]	[No.]
[Designation]	[Grade]	[Survey Role]	Strong / Moderate / Weak	[City]	[No.]
[Designation]	[Grade]	[Survey Role]	Strong / Moderate / Weak	[City]	[No.]

B. Market Comparison (Annual Fixed Pay, ₹)

Internal Role	Internal Median	Market P25	Market P50	Market P75	Market Index (%)	Position
[Designation]	[Amount]	[Amount]	[Amount]	[Amount]	[x]%	Below / At / Above
[Designation]	[Amount]	[Amount]	[Amount]	[Amount]	[x]%	Below / At / Above
[Designation]	[Amount]	[Amount]	[Amount]	[Amount]	[x]%	Below / At / Above
[Designation]	[Amount]	[Amount]	[Amount]	[Amount]	[x]%	Below / At / Above

C. Method Notes

Template · Word

Compensation Benchmarking Sheet

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[Company Logo][Company Name]

PAY EQUITY ANALYSIS SHEET

Company:: [Company Name]
Review Period:: [FY 20XX–XX]
Data as of:: [DD/MM/YYYY]
Confidentiality:: Restricted – HR only

A. Group-level Comparison (Annual Fixed Pay, ₹)

Role / Grade	Location	Women (No.)	Women Median	Men (No.)	Men Median	Gap (%)	Flag
[Designation] / [Grade]	[City]	[No.]	[Amount]	[No.]	[Amount]	[x]%	Review / OK
[Designation] / [Grade]	[City]	[No.]	[Amount]	[No.]	[Amount]	[x]%	Review / OK
[Designation] / [Grade]	[City]	[No.]	[Amount]	[No.]	[Amount]	[x]%	Review / OK
[Designation] / [Grade]	[City]	[No.]	[Amount]	[No.]	[Amount]	[x]%	Review / OK

B. Individual Case Review

Emp ID	Role / Grade	Fixed Pay (₹)	Group Median (₹)	Experience (Yrs)	Last Rating	Explained by	Unexplained Gap (₹)
[Employee ID]	[Designation] / [Grade]	[Amount]	[Amount]	[No.]	[Rating]	[Factor]	[Amount]
[Employee ID]	[Designation] / [Grade]	[Amount]	[Amount]	[No.]	[Rating]	[Factor]	[Amount]
[Employee ID]	[Designation] / [Grade]	[Amount]	[Amount]	[No.]	[Rating]	[Factor]	[Amount]

C. Correction Plan

Template · Word

Pay Equity Analysis Sheet

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Increment Budget Sheet

Preview of the template

A. Pool Summary

B. Department Allocation and Utilisation

C. Total Cost Impact

D. Assumptions

What this template includes

When to use it

How to customise this template

HR tips

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Frequently asked questions

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