Free template template · Word

Increment Calculation Sheet

An increment calculation sheet works out each employee's revised salary component by component once the increment percentage is approved. Payroll and HR use it to compute new basic, HRA, statutory contributions, arrears and monthly in-hand before the revised salary is run.

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[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

Emp ID	Old Monthly Gross (₹)	New Monthly Gross (₹)	Difference (₹)	Arrears Months	Total Arrears (₹)	Payable in Month
[Employee ID]	[Amount]	[Amount]	[Amount]	[No.]	[Amount]	[Month YYYY]
[Employee ID]	[Amount]	[Amount]	[Amount]	[No.]	[Amount]	[Month YYYY]
[Employee ID]	[Amount]	[Amount]	[Amount]	[No.]	[Amount]	[Month YYYY]

Calculation Notes

Basic salary is fixed at [x]% of the new CTC as per the salary structure policy.
HRA is [x]% of basic; the balance of fixed pay is shown as special allowance.
Employer PF is computed at 12% of basic, subject to the wage ceiling rules adopted by the company.
ESI applies where monthly gross is up to ₹21,000; employees crossing the limit are flagged for review.
In-hand is an estimate before income tax and professional tax.

Prepared by
[HR Name]
Date: [Date]

Checked by
[Payroll Lead]
Date: [Date]

Approved by
[Authorised Signatory]
Date: [Date]

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What this template includes

Old and new CTC per employee with the approved percentage
Component-wise split so basic, HRA and allowances stay as per policy ratios
Employer PF recalculated at 12% of basic (subject to wage ceiling rules)
ESI applicability check against the ₹21,000 monthly gross threshold
Arrears months and arrears amount for back-dated increments
Revised monthly gross and estimated in-hand for the employee

When to use it

Converting approved increment percentages into revised salary structures for payroll
Calculating arrears when the increment is effective from an earlier month
Checking how a basic salary change affects PF, ESI eligibility and gratuity provision
Preparing figures to be printed in individual increment letters

How to customise this template

1Replace the components with your actual salary structure heads
2Set the basic-to-CTC percentage used in your company
3Add formula cells if you move the table into Excel
4Add a column for variable pay if it is revised along with fixed pay
5Lock the formula columns before sharing with managers

HR tips

Recalculate PF on the new basic; many errors come from leaving it at the old figure
Flag employees crossing the ESI threshold so their coverage status is reviewed
Round amounts consistently, as per your payroll rounding rule
Have a second person check a sample of rows before payroll upload

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Frequently asked questions

How is a salary increment calculated?+

Multiply the current CTC (or fixed pay, as per policy) by the approved percentage to get the increase, then redistribute the new CTC across basic, HRA and allowances using your salary structure ratios.

Does increment change PF contribution?+

Yes, if basic salary goes up. Employer and employee PF are each 12% of basic plus DA, subject to the wage ceiling rules your company follows.

How are increment arrears calculated?+

Take the difference between the new and old monthly salary and multiply it by the number of months between the effective date and the month the revised salary is first paid.

All 50 increment, promotion & career →

[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

Template · Word

Increment Budget 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

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[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 Calculation Sheet

Preview of the template

Part 1 – CTC Revision Summary

Part 2 – Revised Monthly Structure

Part 3 – Arrears Computation

Calculation Notes

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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