Sample refusal of an employee’s request for raise

When an employee asks for a raise, it’s typically because they’ve performed very well in their job or achieved some other notable achievement.

If your company’s employment policies allow it, you may wish to examine the request, but if they don’t, it’s better to send a formal rejection letter back to the applicant.

How do you draft a letter rejecting a wage raise?

1. Be selective with the words you use.
2. Thank them for requesting this.
3. Say that you’ve given their request your full attention.
4. Explain why you are declining.
5. Indicate a date by which the request will be taken into account (if applicable)
6. Remind them how important they are as a part of the team.

If you decline, you risk alienating a valuable employee who may then opt to quit the firm.

Also See: Sample letter confirming the refund of a duplicate payment

Sample 1: Letter refusing a request for a pay raise

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 provided 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]

Sample 2: Letter refusing a request for an early pay rise

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 favorably at 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]