Sample refusal of an employee’s request for raise

When an employee requests a pay rise, it is usually after achieving excellent results in their role within the company or other outstanding performance related results. Depending on your business’ employment terms you may want to give the request consideration, but if you don’t for whatever reason, it is best to make a formal reply refusing the application.

How do you write a letter refusing a pay raise?

1. Choose your words carefully
2. Thank them for their request
3. Say that you have considered their request thoroughly
4. Explain why you are refusing
5. Offer a time when the request could be considered (if applicable)
6. Emphasise that they are a valued member of staff

This needs to be done sensitively as you don’t want to risk upsetting a valued employee who may decide to leave the company when you refuse.

This will normally be sent via internal mail.

Letter refusing a request for a pay raise – sample 1

Dear [Name]

Thank you for your recent communication requesting an early increase in your current salary.

Whilst we [or the Company] are [is] aware of your performance in your [role/job/position], your terms and conditions of employment provide that we will carry out an annual pay review from 1 May each year [variable, insert date]. We are sorry but we cannot deviate from this policy under any circumstances.

I [we] understand that you are experiencing difficulties at present but unfortunately we cannot help you financially, however we will certainly consider your request when the pay reviews take place.

Yours sincerely

[Your name]
[Your position]

Letter refusing a request for an early pay rise – sample 2

Dear [Name]

Thank you for your letter requesting an early increase in your current salary.

We are aware of your excellent performance in your [role/job/position], and this has been reflected in your manager’s officially recorded appraisal of your work.

Unfortunately we are unable to offer you an increase in salary at this time, but be assured that when the annual pay reviews take place in [month], we will look favourably on your request.

We know you will be disappointed with this response but please understand that company policy does not allow us to make individual salary increases without first going through the review process as stipulated in your job’s terms and conditions, a copy of which you will have been issued you with when you joined the company.

Yours sincerely

[Your name]
[Your position]