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Variable Compensation Statement

A variable compensation statement is a year-end summary for an individual employee consolidating every variable payment received in the financial year, such as variable pay, incentives, commission and bonuses, against the targets set. It gives a single view of at-risk pay earned.

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[Company Logo][Company Name]

VARIABLE COMPENSATION STATEMENT

Financial Year:: [FY YYYY-YY]
Employee Name:: [Employee Name]
Employee ID:: [Employee ID]
Designation:: [Designation]
Department:: [Department]
Date of Issue:: [Date]

Dear [Employee Name],
This statement summarises all variable compensation you earned from [Company Name] during [FY YYYY-YY], compared with the targets applicable to you.

Plan	Annual Target (₹)	Actual Paid (₹)	Payout %	Paid On
Annual Variable Pay	[Amount]	[Amount]	[Percentage]%	[DD/MM/YYYY]
Quarterly Sales Incentive	[Amount]	[Amount]	[Percentage]%	[Q1–Q4 dates]
Sales Commission	N/A	[Amount]	N/A	Monthly
Performance / Spot Bonus	N/A	[Amount]	N/A	[DD/MM/YYYY]
Total	[Amount]	[Amount]	[Percentage]%

Deferred or Pending Amounts

Item	Amount (₹)	Condition	Expected Date
[Retention / Deferred Bonus Tranche]	[Amount]	[Condition]	[DD/MM/YYYY]
[Pending Incentive for Q4]	[Amount]	Subject to collection	[DD/MM/YYYY]

Total Compensation View

Component	Amount (₹)
Fixed Salary Paid	[Amount]
Variable Compensation Paid	[Amount]
Total Cash Compensation	[Amount]
Variable as % of Total	[Percentage]%

All amounts are gross, before TDS. Deferred amounts are payable only if the stated conditions are met. Please contact [HR Name] at [HR Email] for any clarification.

For [Company Name]
[Authorised Signatory]
[Designation]

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What this template includes

Financial year covered
Each variable plan listed separately
Target versus actual for each plan
Payout dates
Total variable earned versus total target
Pending or deferred amounts

When to use it

Year-end total-rewards communication for sales and leadership roles
Before a compensation review, to show realised variable pay
Answering an employee's query on total incentives received
Supporting a retention or counter-offer discussion with facts

How to customise this template

1List each plan the employee participated in
2Pull actual payouts from payroll, not from approvals
3Add deferred or pending tranches with expected dates
4Include fixed pay for context if useful

HR tips

Reconcile totals with Form 16 salary figures
Keep plan names identical to those in policy documents
Show deferred amounts so employees see future value
Issue alongside the annual CTC statement for a full picture

For HR & hiring managers

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Frequently asked questions

What does variable compensation include?+

It includes performance bonus, variable pay, sales incentives, commission and other at-risk payments that depend on results.

How is this different from an incentive payout statement?+

An incentive payout statement covers many employees for one period. A variable compensation statement covers one employee for the whole year across all plans.

Should deferred bonuses be shown?+

Yes. Showing deferred or unvested amounts with their conditions gives a complete picture of what the employee has earned.

All 50 salary, payroll & compensation →

[Company Logo][Company Name]

ANNUAL COST TO COMPANY STATEMENT

Ref. No.:: [Reference Number]
Date:: [Date]
Financial Year:: [FY YYYY-YY]
Employee Name:: [Employee Name]
Employee ID:: [Employee ID]
Designation / Department:: [Designation] / [Department]
Date of Joining:: [Date of Joining]
UAN:: [UAN]

Dear [Employee Name],
This statement summarises the total amount [Company Name] invested in your employment during the financial year [FY YYYY-YY]. It includes cash salary as well as contributions and benefits that do not appear in your monthly in-hand pay.

Part A – Salary Paid

Component	Approved Annual (₹)	Actual Paid (₹)
Basic Salary	[Amount]	[Amount]
House Rent Allowance	[Amount]	[Amount]
Special Allowance	[Amount]	[Amount]
Other Allowances	[Amount]	[Amount]
Bonus / Incentives Paid	[Amount]	[Amount]
Arrears Paid	[Amount]	[Amount]
Total Salary Paid (A)	[Amount]	[Amount]

Part B – Employer Statutory Contributions

Component	Approved Annual (₹)	Actual (₹)
Employer PF (EPF + EPS)	[Amount]	[Amount]
Employer ESI (if covered)	[Amount]	[Amount]
Gratuity Provision	[Amount]	[Amount]
Labour Welfare Fund (employer share, if applicable)	[Amount]	[Amount]
Total Contributions (B)	[Amount]	[Amount]

Report · Word

Cost to Company Statement

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[Company Logo][Company Name]

SALARY ARREARS STATEMENT

Employee Name:: [Employee Name]
Employee ID:: [Employee ID]
Designation:: [Designation]
Revision Reference:: [Reference Number] dated [DD/MM/YYYY]
Effective Date:: [Effective Date]
Arrears Paid With:: [Month YYYY] Payroll

A. Month-wise Due versus Drawn (₹)

Month	Paid Days	Basic Due	Basic Drawn	HRA Due	HRA Drawn	Other Due	Other Drawn	Gross Difference
[Month YYYY]	[Number]	[Amount]	[Amount]	[Amount]	[Amount]	[Amount]	[Amount]	[Amount]
[Month YYYY]	[Number]	[Amount]	[Amount]	[Amount]	[Amount]	[Amount]	[Amount]	[Amount]
[Month YYYY]	[Number]	[Amount]	[Amount]	[Amount]	[Amount]	[Amount]	[Amount]	[Amount]
[Month YYYY]	[Number]	[Amount]	[Amount]	[Amount]	[Amount]	[Amount]	[Amount]	[Amount]
Total		[Amount]	[Amount]	[Amount]	[Amount]	[Amount]	[Amount]	[Amount]

B. Statutory Impact and Net Arrears (₹)

Item	Amount
Total Gross Arrears	[Amount]
Employee PF on Basic Arrears (12%)	[Amount]
Employee ESI on Arrears (0.75%, if covered)	[Amount]
Professional Tax Adjustment	[Amount]
TDS on Arrears	[Amount]
Net Arrears Payable	[Amount]
Employer PF on Arrears (for deposit)	[Amount]
Employer ESI on Arrears (for deposit)	[Amount]

Remarks: [e.g. LOP of 2 days in Month YYYY adjusted; HRA arrears computed at revised rate for metro location].

Template · Word

Salary Arrears Statement

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[Company Logo][Company Name]

INCENTIVE PAYOUT STATEMENT

Company:: [Company Name]
Plan Name:: [Plan Name]
Period:: [DD/MM/YYYY] to [DD/MM/YYYY]
Team / Region:: [Team / Region]
Scheme Reference:: [Reference Number]
Payroll Month:: [Month YYYY]

Employee-wise Payout (₹)

Emp. ID	Employee Name	Target	Achievement	Achv. %	Slab	Gross Incentive	Adjustments	Net Payable
[Employee ID]	[Employee Name]	[Amount]	[Amount]	[Percentage]%	[Slab]	[Amount]	[Amount]	[Amount]
[Employee ID]	[Employee Name]	[Amount]	[Amount]	[Percentage]%	[Slab]	[Amount]	[Amount]	[Amount]
[Employee ID]	[Employee Name]	[Amount]	[Amount]	[Percentage]%	[Slab]	[Amount]	[Amount]	[Amount]
[Employee ID]	[Employee Name]	[Amount]	[Amount]	[Percentage]%	[Slab]	[Amount]	[Amount]	[Amount]
Total		[Amount]	[Amount]			[Amount]	[Amount]	[Amount]

Excluded Employees

Emp. ID	Employee Name	Reason for Exclusion
[Employee ID]	[Employee Name]	[Below gate / Serving notice / Insufficient days]
[Employee ID]	[Employee Name]	[Reason]

Summary

Report · Word

Incentive Payout Statement

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[Company Logo][Company Name]

VARIABLE PAY LETTER

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

Private and Confidential
To,
[Employee Name]
Employee ID: [Employee ID]
[Designation], [Department]

Subject: Variable Pay Payout for [Period]

Dear [Employee Name],
As you know, your compensation includes a target variable pay component linked to performance. We are writing to confirm your variable pay for [Period], determined as per the [Variable Pay Policy Name].

Particulars	Details
Annual Target Variable Pay (as per CTC)	₹[Amount]
Target for this Period	₹[Amount]
Months Eligible in Period	[Number]
Individual Performance Achievement	[Percentage]%
Business Performance Achievement	[Percentage]%
Overall Payout Percentage	[Percentage]%
Variable Pay Payable	₹[Amount]
Payable With Salary of	[Month YYYY]

[Explanation – e.g. The business achieved Percentage% of its annual plan, which resulted in a payout below target for all employees. Your individual achievement was strong, and this is reflected in your individual factor.]

Letter · Word

Variable Pay Letter

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[Company Logo][Company Name]

COMPENSATION REVISION LETTER

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

Strictly Confidential
To,
[Employee Name]
Employee ID: [Employee ID]
[Designation], [Department]

Subject: Revision of Your Compensation Package

Dear [Employee Name],
Following the recent review of your role and contribution, the Compensation Committee has approved a revision of your total compensation package with effect from [Effective Date].

Element	Current	Revised
Fixed Annual Pay (₹)	[Amount]	[Amount]
Target Variable Pay (₹)	[Amount]	[Amount]
Fixed : Variable Mix	[Ratio]	[Ratio]
Total Annual CTC (₹)	[Previous CTC]	[CTC]
Group Medical Cover	₹[Amount] – [Self / Family]	₹[Amount] – [Self / Family / Parents]
Car Lease / Vehicle Allowance	[Details]	[Details]
Mobile and Internet Reimbursement	₹[Amount]/month	₹[Amount]/month
Stock Options	[Number] options	Additional [Number] options as per grant letter

A component-wise breakup of your fixed pay is attached as Annexure A. Variable pay will continue to be governed by the [Variable Pay Policy], and any stock options by the [ESOP Plan Name] and your grant letter, which prevail over this summary.

Letter · Word

Compensation Revision Letter

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[Company Logo][Company Name]

COMPENSATION ADJUSTMENT LETTER

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

Private and Confidential
To,
[Employee Name]
Employee ID: [Employee ID]
[Designation], Grade [Grade]
[Department]

Subject: Adjustment of Compensation Following Internal Pay Review

Dear [Employee Name],
[Company Name] recently completed a review of pay across roles of similar scope, grade and experience to ensure our compensation is fair and consistent. As an outcome of this review, we are adjusting your fixed compensation.

Particulars	Before Adjustment	After Adjustment
Annual Fixed Pay (₹)	[Amount]	[Amount]
Monthly Gross (₹)	[Amount]	[Amount]
Annual CTC (₹)	[Previous CTC]	[CTC]
Position in Grade Range	[Below minimum / Lower quartile]	[Within range / Mid-point]

This is a one-time equity adjustment and is not linked to your performance rating.
You will remain eligible for the annual increment cycle as per policy.
The adjustment is effective from [Effective Date] and will appear in the salary for [Month YYYY].
Component-wise details are in the attached annexure.

Letter · Word

Compensation Adjustment Letter

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[Company Logo][Company Name]

SALARY STRUCTURE – GRADE-WISE

Company:: [Company Name]
Effective From:: [Date]
Version:: [Version Number]
Prepared By:: [HR Name]

1. Component Rules

Basic Salary: [Percentage]% of CTC
HRA: [Percentage]% of Basic (metro / non-metro as per policy)
Special Allowance: balancing figure after all fixed components
Employer PF: 12% of Basic + DA, subject to wage ceiling rules as per policy
Employer ESI: 3.25% of gross for employees earning up to ₹21,000/month
Gratuity provision: as per company policy, payable after 5 years' continuous service

2. Monthly Structure by Grade (₹)

Component	Grade [G1]	Grade [G2]	Grade [G3]	Grade [G4]
Basic Salary	[Amount]	[Amount]	[Amount]	[Amount]
House Rent Allowance (HRA)	[Amount]	[Amount]	[Amount]	[Amount]
Conveyance / Transport Allowance	[Amount]	[Amount]	[Amount]	[Amount]
Special Allowance	[Amount]	[Amount]	[Amount]	[Amount]
Gross Salary (A)	[Amount]	[Amount]	[Amount]	[Amount]
Employer PF	[Amount]	[Amount]	[Amount]	[Amount]
Employer ESI (if applicable)	[Amount]	[Amount]	N/A	N/A
Gratuity Provision	[Amount]	[Amount]	[Amount]	[Amount]
Employer Contributions (B)	[Amount]	[Amount]	[Amount]	[Amount]
Monthly CTC (A + B)	[Amount]	[Amount]	[Amount]	[Amount]
Annual CTC	[Amount]	[Amount]	[Amount]	[Amount]

3. Estimated Deductions and In-hand (₹ per month)

Template · Word

Salary Structure Format

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[Company Logo][Company Name]

ANNEXURE – CTC BREAKUP

Employee / Candidate Name:: [Employee Name]
Designation:: [Designation]
Department:: [Department]
Work Location:: [Work Location]
Annual CTC:: [CTC]
Effective Date:: [Date of Joining]

A. Fixed Earnings

Component	Monthly (₹)	Annual (₹)
Basic Salary	[Basic Salary]	[Amount]
House Rent Allowance	[HRA]	[Amount]
Leave Travel Allowance	[Amount]	[Amount]
Special Allowance	[Amount]	[Amount]
Total Gross Salary (A)	[Amount]	[Amount]

B. Employer Contributions

Component	Monthly (₹)	Annual (₹)
Employer Provident Fund (12% of Basic)	[Amount]	[Amount]
Employer ESI (3.25%, if applicable)	[Amount]	[Amount]
Gratuity Provision	[Amount]	[Amount]
Total Employer Contributions (B)	[Amount]	[Amount]

C. Variable Pay (Target)

Template · Word

CTC Breakup Format

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Variable Compensation Statement

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Deferred or Pending Amounts

Total Compensation View

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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