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Free letter template · Word

Salary Adjustment Letter

A salary adjustment letter documents a change in an employee's pay caused by a change in circumstances, such as relocation, a move from field to office work, a shift pattern change or a switch to part-time hours. It explains which allowances are added or withdrawn and the resulting pay.

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Preview of the letter

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[Company Logo][Company Name]

SALARY ADJUSTMENT LETTER

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

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

Subject: Adjustment of Salary Components

Dear [Employee Name],
Further to [Reference – e.g. your transfer order no. Reference Number dated DD/MM/YYYY from Old Location to New Location], your salary components are being adjusted to reflect the change in your [location / role / shift / working hours].

ComponentCurrent Monthly (₹)Adjusted Monthly (₹)Reason
Basic Salary[Amount][Amount]No change
House Rent Allowance[Amount][Amount][City category change]
Location / Site Allowance[Amount][Amount][Added / Withdrawn]
Shift / Night Allowance[Amount][Amount][Added / Withdrawn]
Travel / Field Allowance[Amount][Amount][Added / Withdrawn]
Gross Monthly Salary[Amount][Amount]

This adjustment is effective from [Effective Date] and is [permanent / temporary until DD/MM/YYYY, after which it will be reviewed]. Your Basic Salary, PF contributions and all other terms of employment remain unchanged unless stated above.

If you have any concerns about this adjustment, please raise them with [HR Name] within [Number] working days. Kindly sign the duplicate copy as acknowledgement.

Regards,

For [Company Name]
[Authorised Signatory]
[Designation]
Acknowledged by
[Employee Name]
Date: [Date]

What this template includes

  • Reason for adjustment linked to a specific change
  • Allowances added, revised or withdrawn
  • Before and after monthly pay table
  • Effective date
  • Whether the change is temporary or permanent
  • Employee acknowledgement

When to use it

  • Transfer to a city with a different HRA or location allowance
  • Moving from a field role (with travel allowance) to an office role
  • Shift change that starts or stops a night or shift allowance
  • Conversion from full-time to part-time hours with pro-rated pay

How to customise this template

  1. 1Name the event (transfer order number, shift roster date, role change)
  2. 2List only the components that change
  3. 3State a review or end date if the adjustment is temporary
  4. 4Attach the transfer or role-change letter as reference

HR tips

  • Discuss the adjustment with the employee before issuing the letter
  • Make sure withdrawn allowances were described as role- or location-linked in the original offer
  • Avoid adjustments that reduce Basic without proper consent
  • Update attendance and shift data in payroll to match

Changes that reduce pay or alter conditions of service may need notice and employee consent under applicable labour law, standing orders or settlements. Review with HR policy and a legal adviser where needed.

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Frequently asked questions

What is a salary adjustment?+

It is a change to pay components because the employee's role, location, hours or shift has changed, as opposed to a merit increase or annual increment.

Can an allowance be withdrawn after transfer?+

Allowances clearly linked to a location or role, such as a site or field allowance, are commonly withdrawn when the condition ends, provided this was communicated in the terms of employment.

Does the employee need to agree to a salary adjustment?+

Where the adjustment reduces pay, written acknowledgement or consent is strongly advisable, and some situations may require formal notice.