Promotion Letter Template

A promotion letter template puts a promotion in writing: the new title, the start date, the new pay, who the person now reports to, and what changes in their job. This free template also includes a separate pay increase letter, for a raise with no change of role. Both are short and friendly, and both ask you to check one thing many small businesses miss: whether the new job is still eligible for overtime.

What you get

A five-page PDF and a Word file you can edit, sized for US Letter paper:

• Page 1: the blank promotion letter.
• Page 2: the blank pay increase letter.
• Pages 3 and 4: both letters filled in for a fictional plumbing and heating company.
• Page 5: notes on overtime status and written notice of pay changes, with links to the sources.

Every detail to change is highlighted as a [placeholder] in the Word file.

What a good promotion letter includes

• The new title and the old one. It makes the change clear in one line.
• The start date of the new role.
• The new manager, if it changes, and the two or three main new duties.
• The new pay, written as a rate. “$26.50 an hour, paid every two weeks” or “$58,000 a year, paid twice a month”, with the current pay for comparison.
• When the new pay starts. Name the pay period, so payroll and the employee agree.
• Overtime status. Say whether the job is exempt or non-exempt, and whether that changes.
• Schedule and location, if they change.
• A signature line for the employee to confirm they received it.

How to write a promotion letter

1. Agree the new title, duties, pay and start date with whoever approves pay.
2. Check the overtime status of the new job before you write the pay line (see below).
3. Tell the employee in person. A promotion is good news, and they will have questions.
4. Fill in the letter the same day, and keep it to the facts that change.
5. Ask them to sign and return a copy. Update payroll before the first pay period at the new rate.
6. Update their job description and file the letter in their personnel file.

Completed example

The example is from a fictional plumbing and heating company in Denver. A dispatcher is promoted to dispatch supervisor from Monday, November 2, 2026. The letter lists her new manager and three new duties: leading two dispatchers, building the weekly on-call rota and handling customer escalations. Her pay goes from $22.00 to $26.50 an hour, paid every two weeks, from the pay period that begins on her start date. The job stays non-exempt, so the letter says she will still be paid overtime for hours over 40 in a workweek. She signs it two days later.

The pay increase example is for a service technician after his annual review: $31.00 to $32.50 an hour from the pay period that begins Monday, January 4, 2027, with his title, duties and overtime status unchanged.

Promotions and overtime status

A promotion is the moment overtime status most often goes wrong. An owner promotes an hourly employee to supervisor, puts them on a salary and stops paying overtime. But a title or a salary alone doesn’t make someone exempt. The US Department of Labor says the job’s duties and salary must meet all the requirements: a salary basis test, a salary level test and a duties test, and job titles don’t count (DOL Fact Sheet #17A). A supervisor who mostly does the same hands-on work as before may still be non-exempt.

Unless exempt, employees must be paid overtime for hours over 40 in a workweek, at least time and one-half their regular rate (DOL: Overtime pay). So if a promotion moves someone from hourly to salaried, check the duties and salary tests on dol.gov before you treat the job as exempt, and say clearly in the letter which it is. If you’re unsure, keep paying overtime until you’ve checked.

Salary increase letter or raise letter

A raise with no change of role needs only a short letter: the reason, the current pay, the new pay and when it starts. The second page of the template does exactly that. Some states require written notice of a pay change. For example, New York requires written notice at least seven calendar days before the change, unless it is shown on the wage statement (Labor Law 195). California requires written notice to non-exempt employees within seven calendar days after a change, unless it is shown on a timely wage statement or another written notice required by law (Labor Code 2810.5). A letter covers it in any state.

What to leave out

• Promises about the future, such as “another raise after six months” or “this will lead to a management role”.
• A yearly salary written as a guarantee. Give the rate and the pay schedule instead.
• Comparisons with coworkers’ pay, or anything about age, family or health.

If the promotion follows a strong year, record it in their performance review too. For a new hire rather than a promotion, use the offer letter.

Not sure whether a promoted employee is still owed overtime? hrsupport.io answers HR questions for your state, with the law behind every answer.