A change to remuneration is a change to the key employment terms and must be notified in writing. Where a promotion changes duties, hours or reporting, the notification should cover those too — not only the number. Restrictive covenants drafted for the old role are also worth revisiting at this point.
Salary Revision and Promotion
Increment, promotion and change of terms
A change to remuneration is a change to the key employment terms and must be notified in writing. Where a promotion changes duties, hours or reporting, the notification should cover those too — not only the number. Restrictive covenants drafted for the old role are also worth revisiting at this point.
| Item | Detail |
|---|---|
| Employee | [NAME], employee number [NUMBER] |
| Current role | [JOB TITLE], [DEPARTMENT] |
| Type of change | [Annual increment / Promotion / Market adjustment / Role change / Combination] |
| Effective from | [DATE] |
| Review period covered | [FROM] to [TO] |
| Recommended by | [NAME], [DESIGNATION] |
| Approved by | [NAME], [DESIGNATION] |
| Covenant review needed? | [Yes / No — see the notes] |
Letter
[COMPANY NAME] Date: [DATE] Reference: [REF] Private and confidential
[EMPLOYEE NAME], [JOB TITLE]
Dear [FIRST NAME],
[Salary revision / Promotion and salary revision]
[OPEN WITH WHAT THE EMPLOYEE ACTUALLY DID. Two or three specific sentences — a project delivered, a problem solved, a standard raised. Generic praise reads as filler and undercuts the news that follows.]
[Where a promotion applies] I am pleased to tell you that you are promoted to [NEW JOB TITLE] with effect from [DATE], reporting to [NAME], [DESIGNATION].
Your remuneration is revised with effect from [DATE] as follows.
| Component | Current (S$ per month) | Revised (S$ per month) | Change |
|---|---|---|---|
| Basic salary | [AMOUNT] | [AMOUNT] | [+ __%] |
| [Fixed allowance — name it] | [AMOUNT] | [AMOUNT] | [+ __%] |
| [Fixed allowance — name it] | [AMOUNT] | [AMOUNT] | [+ __%] |
| Gross monthly salary | [AMOUNT] | [AMOUNT] | [+ __%] |
| Variable bonus at full achievement | [AMOUNT] p.a. | [AMOUNT] p.a. | [+ __%] |
| [Annual Wage Supplement] | [AMOUNT] | [AMOUNT] | — |
| Employer Central Provident Fund contribution | [AMOUNT] | [AMOUNT] | — |
| Total cost to company (annual) | [AMOUNT] | [AMOUNT] | [+ __%] |
4 more pages in the Word file
This is page 1 of the Word document, exactly as it appears when you open it. Fields shown like THIS are placeholders for you to complete.
These notes accompany the template and explain the drafting choices, the compliance points and the mistakes most often made with this document. They appear as a final page in the Word file, intended to be deleted before the document is executed.
Salary, allowances and any other prescribed particular form part of the key employment terms, and any change must be notified to the employee in writing. A payroll adjustment communicated only by a different figure on the payslip does not satisfy that.
Part IV of the Employment Act, which governs hours of work, rest days and overtime, does not apply to managers and executives, and applies to other employees only up to a prescribed salary. An employee promoted into a managerial role, or above the threshold, may cease to be entitled to overtime pay. That is a material change and should be explained — discovering it on the first payslip after a promotion is a poor experience and a common complaint.
A covenant signed when the employee was junior may not protect the interests they now access; one drafted for a wider role may be unreasonable if the role narrows. Because covenants in Singapore are enforceable only so far as reasonable, and reasonableness is assessed against the role, refreshing them at promotion is the cheapest time to get it right. Where a covenant is varied mid-employment, provide fresh consideration — the promotion or increase itself usually serves.
An increase in monthly salary may take the employee above the Ordinary Wage ceiling, so contributions do not rise proportionately. It also changes the Additional Wage ceiling for the year, which is computed by reference to total Ordinary Wages. Employers paying a bonus later in the same year frequently get this wrong.
For pass holders, salary is not merely a commercial matter. A material change may need to be notified, and qualifying salaries rise with age and differ by sector. A change that takes the salary out of line with the pass requirements, in either direction, needs checking before the letter is issued.
Increment decisions are individually reasonable and collectively revealing. Where outcomes correlate with age, nationality, pregnancy, caregiving responsibilities or a period of family leave, that is the pattern most likely to produce a complaint — and the Workplace Fairness Act will make it actionable when it commences. Annexure B exists so the pattern is visible before the letters go out, not after.
Excluding someone from a review because they were on maternity, paternity or shared parental leave during the period, or reducing an outcome because they work flexibly, is precisely the risk. Assess them on the same basis, pro-rating output where genuinely appropriate rather than penalising the absence itself.
The opening paragraph is drafted to require specifics. A letter that says the employee has been "a valued member of the team" alongside a two per cent increase reads as a form letter and is remembered as one.
The instinct is to send a bare number and avoid the conversation. It does not work — the employee draws their own conclusion, usually a worse one than the truth. Where the constraint is business performance rather than individual performance, say that plainly.
Where the effective date precedes the letter, the arrears must be paid, and the Central Provident Fund contributions on them must be made for the correct months. Paying a lump sum in the current month without allocating it correctly creates a contribution discrepancy.
Where a promotion carries an option or share award, the grant is made under the scheme rules with its own grant letter, and the tax treatment differs from cash. Mentioning it in the revision letter is helpful; documenting it there is not.
Where allowances change, each must continue to be itemised individually on the payslip. Rolling several revised allowances into one line to simplify the change is a payslip defect.
A signed acknowledgement puts beyond doubt that the revised terms were communicated and accepted, which matters most where the change is not purely favourable — a role change, a shift in Part IV coverage, or a new covenant.
Reflects Singapore law current as of {{DATE OF USE}}. Part IV salary thresholds, Central Provident Fund ceilings and rates, and work pass qualifying salaries all change — confirm each before a revision cycle, and note that a review of the Employment Act is under way with proposals expected in the second half of 2026.
This is a ready-to-use template provided for convenience. Laws and requirements change, and every situation is different — please have it reviewed by a qualified professional (a lawyer, corporate secretary, or accountant as relevant) before you rely on it.