Employees must be advised of pay reviews in writing as a formal communication.

As employers, we work really hard. We are passionate about our businesses and work often 7 days per week to drive it forward. Sometimes we lose track of the fact that employees come to work and are paid for the hours in their employment contract. They come to work for pay at the end of the day, so pay reviews are something very close to their heart.

The second thing we as employers must remind ourselves is that performance and pay – while obviously interrelated, should not be interdependent.

Pay review letters are required to confirm details of pay reviews in terms of amounts and dates effective from. They are not required to pass comment on performance measures – and indeed they should not.

Pay review letters may also make mention of the impact of the review on holiday pay (which are paid on average hourly earnings for the past 52 weeks) and to confirm that commissions and bonus plans in the Individual Employment Agreement are still in place.

Pay review letters are not in any way a method of changing terms of employment!

Importantly, while you are required to advise employees of pay reviews formally and in writing, there is obviously a huge opportunity to thank the employee for their contribution to your business personally and verbally before sending the pay review letter!

While the letter of advice should be signed by the business owner, a line or unit manager may deliver this communication on your behalf if you are not able to or you do not wish to. We recommend that you take the opportunity to personally thank your employees for their input and for the value that they create in your business, because at the end of the day – while people do work for money, they are motivated to a far greater degree by recognition – and what a fantastic opportunity a pay review is to deliver that acknowledgment.


Download template for formally and correctly acknowledging a pay review to an employee.

pay review letter template