betterjobs

Free letter template · Word

Salary Structure Letter

A salary structure letter informs an employee that the components of their salary are being reorganised, typically with the total CTC unchanged, and sets out the old and new structure side by side. Employers issue it when they restructure pay company-wide, for example to align Basic with the Labour Code wage definition.

  • Editable Word (.docx)
  • Made for India
  • 16 fill-in fields highlighted
  • Free, no sign-up

Preview of the letter

[Highlighted] = fill in
[Company Logo][Company Name]

SALARY STRUCTURE LETTER

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

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

Subject: Revised Salary Structure Effective [Effective Date]

Dear [Employee Name],
As part of a company-wide review of our compensation framework, [Company Name] is updating the way salary components are structured. The purpose of this change is [Reason – e.g. to align our wage components with applicable labour law and simplify payroll]. Your total annual Cost to Company remains ₹[CTC]; only the distribution between components is changing.

ComponentCurrent Monthly (₹)Revised Monthly (₹)
Basic Salary[Amount][Amount]
House Rent Allowance[Amount][Amount]
Leave Travel Allowance[Amount][Amount]
Special Allowance[Amount][Amount]
Employer PF[Amount][Amount]
Gratuity Provision[Amount][Amount]
Monthly CTC[Amount][Amount]
Estimated Net Pay[Amount][Amount]

What this means for you

  • Your PF contribution and the employer PF contribution will be calculated on the revised Basic.
  • Your estimated monthly take-home may change by about ₹[Amount] because of higher statutory contributions.
  • Your gratuity entitlement, when eligible, will be calculated on the revised wages.
  • All other terms of your appointment remain unchanged.

The revised structure will be reflected in your salary for [Month YYYY]. If you have any questions, please contact [HR Name] at [HR Email] before [Date]. Kindly sign and return the duplicate copy of this letter as acknowledgement.

Warm regards,

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

What this template includes

  • Clear statement that total CTC is unchanged (or the exact change)
  • Reason for the restructuring in plain language
  • Side-by-side old versus new component table
  • Impact on in-hand pay, PF and gratuity explained
  • Effective date and payroll month
  • Acknowledgement section for the employee

When to use it

  • Company-wide restructuring of components with no change in CTC
  • Aligning Basic and allowances with the wage definition under the Labour Codes
  • Introducing a new component such as LTA or a meal card in place of special allowance
  • Moving an employee from a legacy structure after a merger

How to customise this template

  1. 1Fill both columns from the current and proposed payroll structure
  2. 2Explain whether higher Basic will increase PF and therefore reduce in-hand slightly
  3. 3Add a contact person for queries and a deadline for questions
  4. 4Use a mail-merge so each employee receives their own figures

HR tips

  • Communicate before the payroll month so the first changed payslip is not a surprise
  • Show the in-hand impact honestly; hiding it damages trust
  • Hold a short briefing or FAQ session for larger teams
  • Collect signed acknowledgements and store them in personnel files

Restructuring salary components can affect statutory contributions and conditions of service. Review the change against the Labour Codes, state rules, any settlement or standing orders, and with a legal adviser before issuing.

For HR & hiring managers

Hire top talent from BetterJobs

Experienced and fresher candidates across India — blue, grey and white collar. Post a job in 5 minutes and start receiving applications.

  • Post in 5 minutesDescribe the role in one line — we write the job description.
  • Verified applicantsEvery applicant has a verified mobile number.
  • Resume databaseSearch experienced candidates by skill, city and experience.

Frequently asked questions

Can an employer change the salary structure without changing CTC?+

Employers often reorganise components within the same CTC, but because it affects conditions of service and contributions, it is good practice to inform employees in writing and obtain acknowledgement.

Why does in-hand salary reduce when Basic increases?+

PF is calculated on Basic, so a higher Basic raises both employee and employer PF. If CTC stays the same, the extra contribution reduces the take-home amount even though retirement savings increase.

Does the employee need to sign the salary structure letter?+

A signed acknowledgement is recommended. It shows the employee was informed of the change and its effective date.