Payroll – Razorpay Learn https://razorpay.com/learn Articles and stories to help you run your business better Wed, 11 Sep 2024 11:44:43 +0000 en-US hourly 1 https://wordpress.org/?v=6.1.7 https://d6xcmfyh68wv8.cloudfront.net/learn-content/uploads/2020/01/favicon-1-150x150.png Payroll – Razorpay Learn https://razorpay.com/learn 32 32 Salary Increment Letter: Meaning, Importance, Format, Sample and Tips https://razorpay.com/payroll/learn/salary-increment-letter/ https://razorpay.com/payroll/learn/salary-increment-letter/#respond Wed, 11 Sep 2024 10:56:44 +0000 https://razorpay.com/learn/?p=13276 A salary increment letter is a powerful tool that defines your performance review in your organisation. It has all the details – your achievements and the contribution you have made towards your company’s growth. This document defines whether your professional goals have been met and reflects your worth in terms of an increment in your [...]

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A salary increment letter is a powerful tool that defines your performance review in your organisation. It has all the details – your achievements and the contribution you have made towards your company’s growth.

This document defines whether your professional goals have been met and reflects your worth in terms of an increment in your salary. 

In this blog, we will walk you through a salary increment letter, why it is important, a sample format for the letter and tips to craft a well-written letter. 

What is a Salary Increment Letter?

A salary increment letter is a formal document written by an employee asking for a raise in their current salary. The skeleton of this letter can be based on various factors such as the employee’s performance, achievements, undertaking additional responsibilities, and market conditions. 

The letter indicates and justifies the reason the employee is requesting a raise in their pay. You should focus on highlighting your contributions and accomplishments when writing a salary increment letter. Remember, this document is the best weapon in your arsenal for getting what you deserve at your workplace. 

Importance of Salary Increment Letter

A salary increment letter is important in both personal and professional development. Personally, the hike you will get will help you strengthen your finances. And professionally, it will help you in your career progression. 

Below listed points will help you understand the importance of a salary increment letter clearly: 

Formal Documentation

When you write a salary increment letter, you formally document your request for a raise. Your intention behind requesting a raise will be recorded, which in turn will lessen the chances of any misunderstandings in the future.

Justify your Value

A salary increment letter allows you to articulate and highlight your achievements. Not only that, it also showcases your contributions that have added value to the growth of the team and the organisation. 

Supports Career Growth

Requesting a salary increment in a structured manner can help you advance your career. It shows that you are proactive about your career development and are willing to advocate for yourself.

Motivates Performance

Sending a salary increment letter can be a motivating factor for both you and your employer. It provides a tangible goal to work towards and can lead to increased job satisfaction and engagement.

Salary Increment Letter Format

A salary increment letter should be well-crafted so that your request for an increase in salary doesn’t go unnoticed by your employer/manager. 

You can use the below format to write a salary increment letter:

[Your Name]

[Your Job Title]

[Department]

[Date]

Subject: Request for Salary Increment

Hi [Name], 

I hope this email/message finds you well. 

I am writing this email/message to formally request a raise in my current salary. With over [Enter Duration] years, I have contributed to [Company Name] in various roles and responsibilities.

I strongly believe that my performance and accomplishments will justify my request for the raise. 

Listed below are a few of my major accomplishments that contributed [Percentage] to the organisation’s growth: 

  1. [Achievement 1]
  2. [Achievement 2]
  3. [Achievement 3]

An adjustment in my current compensation would boost my morale and help me contribute more towards the continued growth of the organisation. 

I am happy to discuss this further at your convenience. 

Awaiting your response. 

Yours sincerely 

[Name]

Salary Increment Letter Sample

Rahul Kumar

Brand Manager

Corporate Marketing

10/09/2024

Subject: Request for Salary Increment

Hi Priya, 

I hope this email finds you well. 

I am writing this email to formally request a raise in my current salary. For over 8 years, I have contributed to XYZ Corporation in various roles and responsibilities.

I strongly believe that my performance and accomplishments will justify my request for the raise. 

Listed below are a few of my major accomplishments that would help you derive a decision:

  • Successful Implementation of Brand Campaign: Led the team with a strategic initiative for branding, resulting in an increase of 25% in brand awareness, and an 18% boost in engagement with the new market positioning of our product. 
  • Product Launch: Collaborated with the product and project team to help deliver the new product launch that involved rigorous market research and a go-to-market strategy. 

An adjustment in my current compensation would boost my morale and help me contribute more towards the continued growth of the organisation. 

I am happy to discuss this further at your convenience. 

Awaiting your response. 

Yours sincerely 

Rahul Kumar

Tips to Write a Salary Increment Letter

Writing a good salary increment letter needs preparation and research. A well-curated salary increment letter has a higher chance of getting reviewed diligently. This increases the probability of getting a good increase. 

Here are a few tips to help you: 

  1. Research the market and benchmark the current pay for your role across the industry. Understand the key responsibilities of the role and assess where you stand. 
  2. Structure your increment letter. Use professional language and ensure to state the reason for writing the letter at the outset. 
  3. Be specific about your accomplishments and try to use numbers, and figures as much as possible to highlight your contributions. 
  4. Subtly highlight your value and showcase how you have been consistently meeting your goals. 
  5. Proofread the salary increment letter before sending it to be sure that there are no errors in it.

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FAQs

How to write a letter for a salary increment?

Start the salary increment letter with greetings, and maintain professional language throughout the letter. Mention the reason for asking for a raise in the salary and justify the request by adding in your accomplishments.

When should you write a salary increment letter?

You can write a salary increment letter if you have been not given any raise in recent years, or if you have performed well and contributed greatly towards the growth of the company.

How to justify the salary increment in the letter?

Mention your accomplishments in the salary increment letter and quantify your achievements. You may also add about the other responsibilities undertaken by you and how you have managed to deliver them considering the timelines.

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How to Write a Resignation Acceptance Letter https://razorpay.com/payroll/learn/resignation-acceptance-letter/ https://razorpay.com/payroll/learn/resignation-acceptance-letter/#respond Wed, 11 Sep 2024 10:41:43 +0000 https://razorpay.com/learn/?p=10549 What is a Resignation Acceptance Letter? A resignation acceptance letter is a formal document sent by an employer to acknowledge an employee’s resignation. It confirms that the employer has received and accepted the employee’s decision to leave the company, creating a clear record of the resignation and helping to avoid any misunderstandings down the line. [...]

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What is a Resignation Acceptance Letter?

A resignation acceptance letter is a formal document sent by an employer to acknowledge an employee’s resignation. It confirms that the employer has received and accepted the employee’s decision to leave the company, creating a clear record of the resignation and helping to avoid any misunderstandings down the line.

The letter may also include details about the employee’s last day of work, any outstanding tasks or projects they need to complete, and information about returning company property. Additionally, the letter often expresses appreciation for the employee’s contributions and offers them well wishes for their future endeavours.

Managing an employee’s resignation is part of the larger employee lifecycle. Managing this lifecycle is infinitely easier with automation and software like RazorpayX Payroll.

Find out how

Format of Resignation Acceptance Letter

The resignation of an employee must be handled with care. It is important for departing employees to continue to have a positive opinion of the business and management. Thus, your resignation acceptance letter must be professional and well-formatted. Here is a quick rundown of the ideal format of a resignation acceptance letter.

1. Header: Include your company’s letterhead at the top.

2. Date: Align left and include the current date.

3. Employee Information: Include the employee’s name, job title (optional), and employee ID (optional) aligned left below the date.

4. Salutation: Use a formal salutation like “Dear [Employee Name]”.

5. Acknowledgement: State that you are writing to acknowledge receipt of their resignation letter. Mention the date their resignation letter was received.

6. Acceptance: Clearly state that their resignation is accepted.

7. Last Day of Work: Specify the employee’s last day of work based on their notice period.

8. Appreciation (Optional): Express gratitude for their contributions to the company. You may also include specific examples of their contributions.

9. Transition & Support (Optional): Briefly outline any steps for a smooth handover or offer support during the transition.

10. Closing: Thank the employee again and wish them well in their future endeavours.

11. Signature: Include your signature and typed name with your designation below.

10 Sample Resignation Acceptance Letters

Here are a few samples of resignation acceptance letters when the employee resigns.

Reason 1: Pursuing other career opportunities

Dear [Employee Name],

This letter acknowledges receipt of your resignation letter dated [Date of Resignation Letter] for your position as [Job Title] at [Company Name]. We accept your decision to pursue other career opportunities.

While we are sorry to see you leave, we understand the desire for professional growth and wholeheartedly support your next chapter. Your contributions to [mention specific projects or areas] have been invaluable, and we appreciate your dedication and hard work during your time here.

Your last day of employment will be [Last Day of Work] in accordance with your notice period. To ensure a smooth transition, we would appreciate your assistance in wrapping up your current projects and training your replacement. Please don’t hesitate to reach out to me or Human Resources if you have any questions during this process.

We wish you all the best in your future endeavors.

Sincerely,

[Your Name] [Your Title]

Reason 2: Pursuing higher studies

Dear [Employee Name],

This letter acknowledges receipt of your resignation letter dated [Date of Resignation Letter] for your position as [Job Title] at [Company Name]. We accept your decision to pursue higher education.

We understand and fully support your commitment to furthering your knowledge and qualifications. The skills and experience you’ve gained here will undoubtedly serve you well in your studies. Your contributions to [mention specific projects or areas] have been valuable, and we appreciate your dedication and hard work during your time here.

Your last day of employment will be [Last Day of Work] in accordance with your notice period. To ensure a smooth transition, we would appreciate your assistance in wrapping up your current projects and training your replacement. Please don’t hesitate to reach out to me or Human Resources if you have any questions during this process.

We wish you all the best in your academic journey and future endeavors. We’re confident you’ll achieve great things.

Sincerely,

[Your Name] [Your Title]

Reason 3: Personal issues

Dear [Employee Name],

This letter acknowledges receipt of your resignation letter dated [Date of Resignation Letter] for your position as [Job Title] at [Company Name]. We accept your resignation.

While we are sorry to see you leave, we understand that you are facing personal circumstances that require your attention. We fully support your decision to prioritize your well-being during this time.

Your contributions to [mention specific projects or areas] have been valuable, and we appreciate your dedication and hard work during your time here.

Your last day of employment will be [Last Day of Work] in accordance with your notice period. To ensure a smooth transition, we would appreciate your assistance in wrapping up your current projects as much as possible. Please don’t hesitate to reach out to me or Human Resources if you have any questions or require any support during this process.

We wish you all the best as you navigate your personal situation. Please know that you are welcome to reach out in the future if there’s anything we can do to help.

Sincerely,

[Your Name] [Your Title]

Reason 4: Health issues

Dear [Employee Name],

This letter acknowledges receipt of your resignation letter dated [Date of Resignation Letter] for your position as [Job Title] at [Company Name]. We accept your resignation.

We were sorry to learn about the health issues you’re facing. Your well-being is our top priority, and we completely support your decision to focus on your health and recovery.

Your contributions to [mention specific projects or areas] have been valuable, and we appreciate your dedication and hard work during your time here.

Your last day of employment will be [Last Day of Work] in accordance with your notice period. However, depending on your health situation, we are flexible with this timeframe. Please let us know if there are any adjustments we can make to accommodate your needs.

To ensure a smooth transition, we would appreciate your assistance in wrapping up your current projects as much as possible, given your health. Please don’t hesitate to reach out to me or Human Resources if you have any questions or require any support during this process. We are happy to help in any way we can.

We wish you all the best in your recovery. Please know that you are welcome to reach out in the future if there’s anything we can do to help.

Sincerely,

[Your Name] [Your Title]

Reason 5: For a better work life balance

Dear [Employee Name],

This letter acknowledges receipt of your resignation letter dated [Date of Resignation Letter] for your position as [Job Title] at [Company Name]. We accept your resignation.

We understand and respect your decision to prioritize achieving a better work-life balance. It’s important to find a work environment that complements your personal life.

Your contributions to [mention specific projects or areas] have been valuable, and we appreciate your dedication and hard work during your time here.

Your last day of employment will be [Last Day of Work] in accordance with your notice period. To ensure a smooth transition, we would appreciate your assistance in wrapping up your current projects and training your replacement. Please don’t hesitate to reach out to me or Human Resources if you have any questions during this process.

We wish you all the best in finding a work environment that allows you to achieve a greater sense of balance and fulfillment.

Sincerely,

[Your Name] [Your Title]

Reason 6: Retirement

Dear [Employee Name],

This letter acknowledges receipt of your resignation letter dated [Date of Resignation Letter] for your position as [Job Title] at [Company Name]. We accept your well-deserved retirement.

After [Number] years of dedicated service, we are sad to see you go, but we wholeheartedly congratulate you on this exciting new chapter in your life. Your contributions to [mention specific projects, areas, or achievements] have been instrumental to our success, and we are incredibly grateful for your hard work and expertise.

Your last day of employment will be [Last Day of Work] in accordance with your notice period. To ensure a smooth transition, we would appreciate your assistance in wrapping up your current projects and training your replacement. Please don’t hesitate to reach out to me or Human Resources if you have any questions or require any support during this process.

We wish you all the best in your retirement. We hope you enjoy this well-earned time to relax, pursue your passions, and create lasting memories. Please know that you are always welcome to stay connected with the company.

Sincerely,

[Your Name] [Your Title]

Reason 7: Internal conflict with colleagues or managers

Dear [Employee Name],

This letter acknowledges receipt of your resignation letter dated [Date of Resignation Letter] for your position as [Job Title] at [Company Name]. We accept your resignation.

While we are sorry to see you leave, we understand that you have encountered challenges within the team/department. We appreciate you bringing this to our attention.

Your contributions to [mention specific projects or areas] have been valuable, and we appreciate your dedication and hard work during your time here.

Your last day of employment will be [Last Day of Work] in accordance with your notice period. To ensure a smooth transition, we would appreciate your assistance in wrapping up your current projects as much as possible. Please don’t hesitate to reach out to Human Resources if you have any questions or require any support during this process. We are committed to maintaining a positive and respectful work environment, and we will take steps to address any underlying issues within the team.

We wish you all the best in your future endeavors.

Sincerely,

[Your Name] [Your Title]

Reason 8: Culture fitment issues

Dear [Employee Name],

This letter acknowledges receipt of your resignation letter dated [Date of Resignation Letter] for your position as [Job Title] at [Company Name]. We accept your resignation.

While we are sorry to hear you’re leaving, we understand that sometimes cultural fit can be a significant factor in job satisfaction. We appreciate you giving [Company Name] a chance, and we wish you all the best in finding a work environment that aligns more closely with your values and preferences.

Your contributions to [mention specific projects or areas] have been valuable, and we appreciate your dedication and hard work during your time here.

Your last day of employment will be [Last Day of Work] in accordance with your notice period. To ensure a smooth transition, we would appreciate your assistance in wrapping up your current projects as much as possible. Please don’t hesitate to reach out to me or Human Resources if you have any questions during this process.

We are always striving to improve our company culture, and your feedback is valuable. If you’d be open to it, we would appreciate the opportunity to discuss your experience in more detail during an exit interview. This will help us identify areas where we can create a more inclusive and engaging environment for all employees.

In the meantime, we wish you all the best in your future endeavors.

Sincerely,

[Your Name] [Your Title]

Reason 9: Mergers or acquisition

Dear [Employee Name],

This letter acknowledges receipt of your resignation letter dated [Date of Resignation Letter] for your position as [Job Title] at [Company Name]. We accept your resignation.

We understand that the recent merger between [Company Name] and [Merging Company] may have caused uncertainty regarding your role and future prospects. We appreciate you informing us of your decision.

Your contributions to [mention specific projects or areas] have been valuable, and we appreciate your dedication and hard work during your time here.

Your last day of employment will be [Last Day of Work] in accordance with your notice period. To ensure a smooth transition, we would appreciate your assistance in wrapping up your current projects as much as possible. Please don’t hesitate to reach out to me or Human Resources if you have any questions during this process.

We wish you all the best in your future endeavors. As the integration process continues, we are committed to creating a positive and stable work environment for all employees. We encourage you to stay informed about any developments that may impact your role or career opportunities within the merged company.

In the meantime, we thank you for your contributions and wish you all the best in your future endeavors.

Sincerely,

[Your Name] [Your Title]

Reason 10: Undisclosed reasons

Dear [Employee Name],

This letter acknowledges receipt of your resignation letter dated [Date of Resignation Letter] for your position as [Job Title] at [Company Name]. We accept your resignation.

While we are sorry to see you leave, we respect your decision.

Your contributions to [mention specific projects or areas] have been valuable, and we appreciate your dedication and hard work during your time here.

Your last day of employment will be [Last Day of Work] in accordance with your notice period. To ensure a smooth transition, we would appreciate your assistance in wrapping up your current projects as much as possible. Please don’t hesitate to reach out to me or Human Resources if you have any questions during this process.

We wish you all the best in your future endeavors.

Sincerely,

[Your Name] [Your Title]

Importance of an Employee Resignation Policy

Employee resignation policy is a must-to-have part of your employee culture in the organisation. Regardless of the size of your company, this process will help you streamline the objectives of your company with the employees. Without this policy, there wouldn’t be any structure resulting in confusion and conflict. 

Also, this policy will help you keep track of your organisation’s attrition rate and understand the reason employees are choosing to leave. If you identify the reason and work around it, you may lower the attrition rate. 

For an employee, an official resignation acceptance letter gives them a confirmation that the organisation has decided to accept their request. Confirmation on the last working day will allow them to plan their handover smoothly. 

Resignation Acceptance Letter Template

A resignation acceptance letter should be short, formal and clear. You can use the below template to write an acceptance letter for resignation: 

[Your Company’s Letterhead]

[Date]

[Employee’s Name]
[Employee’s Position]
[Employee’s Address]
[City, State, Pincode]

Dear/Hi [Employee Full Name], 

I am writing to formally acknowledge the receipt of your resignation letter dated [date of resignation letter]. We are disheartened that you will be leaving our organisation, however, we respect your decision. 

Your last working day with us will be [Enter Date]. During the period of notice, we will plan and work for a smooth handover of your responsibilities. 

We highly appreciate your contributions towards the company during your tenure with us. Your efforts and hard work have been valuable to the growth of the company. 

Please let us know if there is anything specific you need during your transition or if there are any additional details we should address.

We wish you continued success in your future endeavours.

Sincerely,

[Your Full Name]
[Your Position]
[Company Name]
[Contact Information]

Tips for Writing a Resignation Acceptance Letter

A resignation acceptance letter must be crafted carefully as it is a formal communication from the company/organisation to the employee stating that their request for resignation has been officially accepted. 

Here are a few tips to help you write a resignation acceptance letter: 

  • Prompt Response: Acknowledge the resignation and be quick to respond to the request. 
  • Subject Line: The subject line of the letter should indicate the intent of the communication. 
  • Clear Communication: Ensure that the acceptance letter for resignation has all the necessary details such as the last working day of the employee, the handover process, and other relevant information. 
  • Compliant with Policy: The acceptance letter shouldn’t include anything that is against the company policy. 
  • Avoid Criticism: Do not be critical of the employee’s performance or share any negative work-related feedback in the resignation acceptance letter. 
  • Proofread and Cross-Check: Before hitting the send button, go through the letter once and check for grammatical or typographical errors. 
  • Maintain a Professional Tone: Keep the letter formal and respectful, even if your relationship with the employee was informal. Avoid negativity or gossip.

  • Acknowledge the Resignation: Clearly state that you are acknowledging receipt of their resignation letter and formally accepting their decision to leave.

  • Briefly Address Reason for Leaving (if known): If the employee disclosed their reason for resigning (better work-life balance, retirement, etc.), you can acknowledge it in a sentence or two. Avoid mentioning reasons you don’t know for sure or that may be sensitive (internal conflicts).

  • Express Appreciation: Thank the employee for their contributions to the company. Mention specific projects, areas, or achievements if possible.

  • Facilitate a Smooth Transition: Briefly outline any steps the employee can take to ensure a smooth handover of their projects and responsibilities..

  • Close with Well Wishes: Express your best wishes for the employee’s future endeavors.

  • Maintain Confidentiality: Avoid mentioning any confidential information about the employee or the company in the letter.

  • Use automation: Consider using HR management systems like RazorpayX Payroll Software HRMS to streamline the resignation acceptance process. These platforms often have pre-built resignation acceptance letter templates that you can customize with the employee’s details and specific reason for leaving (if known). This can save you time and ensure you’re covering all the essential points in a professional manner.

RazorpayX Payroll simplifies a lot more than employee management. It makes your payroll process infinitely easier with features like accounting and HRMS integrations, real time alerts on regulatory changes and more.

RazorpayX Payroll is India’s only automated payroll compliance software. Here’s how RazorpayX Payroll helped Ankur Warikoo with his payroll woes.

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FAQs

Who writes a resignation acceptance letter?

As a resignation acceptance letter is a part of the off-boarding process for an employee, it can be written by HR, the Manager, or the Department Head.

What are the do's and don'ts of a resignation acceptance letter?

Ensure that the resignation acceptance letter has empathy and professionalism. Do not include any negative feedback in the letter, or do not delay sending the letter once you have discussed it with the employee. Be clear and concise and write the letter considering the company’s compliance policies.

What needs to be included in a resignation acceptance email?

A resignation acceptance email should have an acknowledgement, the effective date of the last working day of the employee, and should communicate the handover steps. Maintain a professional tone while appreciating their efforts in the company.

How can I send a resignation acceptance email?

You can send the resignation acceptance letter via email. The employee will receive it at their email address. You may copy the HR in the email or send a copy separately to the HR notifying them of the communication.

What tone should I use while writing approval of the resignation email?

While approving the request for resignation, your email should be concise, professional, short, and respectful.

When should a resignation acceptance letter be sent?

A resignation acceptance letter should be sent immediately after you discuss it with the employee. Do not delay sending the letter once you discuss as it might not create a good impression. Sending the letter on time will speak of the company’s value towards their employees and their decision.

The post How to Write a Resignation Acceptance Letter appeared first on Razorpay Learn.

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Leave Encashment – Meaning, Calculation, Tax Exemption https://razorpay.com/payroll/learn/leave-encashment-calculation/ https://razorpay.com/payroll/learn/leave-encashment-calculation/#respond Wed, 11 Sep 2024 07:35:11 +0000 https://razorpay.com/learn/?p=6140 Leave encashment is the amount of money an employee receives from an employer for their unutilised leaves. Read the blog post to know how to calculate leave encashment.

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What is Leave Encashment?

Leave encashment is the process of calculating and crediting the amount of cash in exchange for an employee’s unused paid leaves. Employees can save their leaves to receive money when they leave their job or retire. Leave encashment is included in the employee’s full and final settlement.

The leave encashment policy differs from company to company, and the rules vary. Some companies usually pay for the leaves taken, or some adjust them in the next calendar year. 

Manage leave and attendance tracking with digital-first payroll solutions like RazorpayX Payroll – calculate leave encashment with only one click!

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Types of Leaves

To encash your leaves, you need to know the types of leaves, and which of them can be encashed. Here are different types of leaves:

Leave Type Description Eligibility for Encashment
Casual Leave Commonly used leave with a duration of 7 to 10 days. Must inform employer for encashment. Eligible
Privilege Leave Requires prior notice and varies by organization. Eligible for encashment after a period. Eligibility varies
Medical Leave or Sick Leave For health conditions, requires employer notice. Eligible for encashment, but not long-term. Eligible (Excluding long-term)
Sabbaticals For upskilling, paid and reimbursed by the organization. Eligible for encashment. Eligible
Holiday Leaves Paid leaves, no salary deduction. Eligible for encashment. Eligible
Maternity Leave Available to pregnant employees, varies in duration. Not eligible for encashment. Not eligible
Compensatory Leave / Comp Off Comp off is paid time off given to employees in exchange for working overtime or on holidays. Not eligible
Floater Leave A short period of leave an employee can take on a chosen workday, subject to company approval. Eligibility varies
National Holiday A designated paid day off to commemorate a national event. Not eligible
Marriage Leave Paid leave granted to an employee specifically for getting married. Not eligible
Unpaid Leave A period of leave an employee takes without receiving regular pay. Not eligible

Is Leave Encashment Taxable? 

Any leave is available for encashment during service, at retirement, or when a person resigns. When encashed during the service period, it is fully taxable and part of the salary income. However, one can claim some relief under Section 89 of the Income Tax Act.

Read more: Leave Management System

Leave Encashment During Employment

Leaves encashed while the employee is still employed are subject to taxation since the amount encashed becomes part of the “income from salary” head.

Tax benefits under Section 89 apply to this head, and employees can save tax by filling out Form 10E to claim tax relief.

Leave Encashment At Retirement or Resignation

Leave encashment can be received by the employees when they are still in employment, when they choose to retire, or when they resign. The leave encashment amount becomes part of the salary and is fully taxed if applied for when in employment. Section 89 of the Income Tax Act provides some tax relief. 

For government employees, both state and central, the entire amount is tax-exempted. However, for private employees, the leave encashment amount is partially taxable. The tax is calculated based on Section 10(10AA)(ii).

Leave Encashment for Legal Heirs of a Deceased Employee

Leave encashment for legal heirs of a deceased employee whether a government or a private employee, the amount is completely exempted from taxation. 

As per the latest tax norms introduced on 1 April 2023, a limit of ₹25 lakhs has been set. That means leave encashment amounts up to ₹25 lakhs will be exempted from tax for private employees. This will be valid provided they meet specified conditions mentioned under Section 10 of the Income Tax Act. 

For government employees, the taxation of leave encashment works differently than for non-government employees. 

Situation Taxation Law 
During Service  The complete amount will be taxable under salary. However, you can get tax benefits under Section 89 and Form 10E. 
During Retirement or Resignation (Government Employees) Tax-free
During Retirement or Resignation (For Private Employees) The lesser of the actual leave encashment received, the average salary for 10 months, or the cash equivalent of unutilized earned leave (limited to 30 days per year of service).
Legal Heirs of the Deceased Employee Tax-free

Leave Encashment Formula

Leave encashment is calculated with a basic formula, i.e., 

[(Average Basic salary + Average Dearness Allowance) / 30] * No. of Earned Leaves

In the above formula, 

  • Average Basic Salary = Average monthly basic salary 
  • Average Dearness Allowance = Average monthly dearness allowance (DA)
  • No. of Earned Leaves = Total number of leaves accumulated

Leave Encashment Calculation

The leave encashment calculation formula considers the per day salary of the employee, which is inclusive of the basic salary along with the Dearness Allowance (DA). This amount is then divided by 30 (assuming the month has 30 days). The number is then multiplied by the number of leaves accumulated by the employee to get the final result.

Here’s an example of leave encashment calculation to help you understand it better: 

Anil has been an employee of XYZ Corporation for 20 years and he was entitled to 35 days of annual leave. His monthly salary including the Dearness Allowance is ₹50,000. During his tenure at XYZ Corporation, he used only 120 days as leave and accumulated the remaining leaves. 

This is how his leave encashment will be calculated: 

Total leave entitlement over 20 years: 20 years X 35 days/year = 700 days 

Accumulated Leaves (Earned Leaves): 700 days−120 days=580 days

Per Day Salary: ₹50,000/30 = ₹1,666.67 

Leave Encashment Amount: ₹1,666.67×580=₹9,66,670

In this case, Anil’s leave encashment of ₹9,66,670 was higher than ₹3,00,000, so only ₹3,00,000 would be exempt from tax. The remaining amount, ₹6,66,670, would be taxable.

Leave Encashment for Legal Heirs of a Deceased Employee

Leave encashment for legal heirs of a deceased employee whether a government or a private employee, the amount is completely exempted from taxation. 

As per the latest tax norms introduced on 1 April 2023, a limit of ₹25 lakhs has been set. That means leave encashment amounts up to ₹25 lakhs will be exempted from tax for private employees. This will be valid provided they meet specified conditions mentioned under Section 10 of the Income Tax Act. 

For government employees, the taxation of leave encashment works differently than for non-government employees. 

What is Leave Encashment Policy?

Leave encashment is a policy wherein an employee is entitled to receive cash in exchange for their unused or unutilised leaves in a year. Employees can save their leaves and get the amount when they retire or when they resign. 

The leave accumulation policies of companies may vary from each other. However, generally, companies allow employees to carry over unused leaves from the current year to the next year. Employees can get paid for the unused leaves and can benefit from not using their leaves. 

However, the leave encashment amount is taxable with some exemptions. Government employees are exempted from tax when they retire and encash their unused leaves.

Process of Leave Encashment

Leave encashment allows employees to convert their unutilised paid leave days into monetary compensation. The specific process can vary depending on the company’s leave policy, but here’s a general breakdown:

Accumulation of Unused Leaves

The employee ends the year with a certain amount of unused leaves which are eligible for encashment.

Initiating the Request

The employee submits a formal request which may involve filling out a leave encashment form or submitting a written request to HR.

Calculation and Approval

The HR department will calculate the encashment amount based on your company’s policy. This often involves multiplying your daily salary (basic pay + dearness allowance) by the number of days being encashed.

Your manager or HR might need to approve the request based on operational needs and your leave balance.

Monetary Valuation & Payment

Once approved, the encashment amount will be included in your final salary or paid out separately depending on company policy. Taxes are also deducted from this final payment if applicable.

Automated Leave Encashment Calculation

The longer an employee works for a company, the more complex the calculations for leave encashment become. Leave all the tedious calculation work to RazorpayX Payroll and focus on what you do the best – managing your business!

Read more:

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Attendance Management System

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FAQs

1. Are leave salary and leave encashment the same?

Leave salary, which is accumulated over time and encashed later, is leave encashment. Leave salary is, thus, a part of leave encashment.

2. Is leave encashment taxable?

Yes, leave encashment is taxable. However, the taxation conditions differ in the sector one is employed in and the terms and conditions set by the employer.

3. How is leave encashment calculated?

Leave encashment is calculated with the following formula. = [(Basic Salary + Dearness Allowance) / 30] * No of EL Here, EL= Earned leave. Read more details in the example provided in the blog.

What is the maximum number of leaves that an employee can encash?

The specific number of leaves that can be encashed varies from company to company. Make sure to check your company's leave policy to understand this further.

Can casual leaves, sick leaves, etc., be encashed?

Casual leave is eligible to be encashed, but depends heavily on the leave policy of the company. The same applies for sick leaves and other kinds of leaves. You can reach out to your HR to understand your company's policy on leave encashment.

Is leave encashment taxable after termination?

Leave encashment after termination can be taxable. The exact tax treatment depends on your country's regulations and your company's policy. It's best to consult your HR department or a tax professional for clarification.

What is the maximum exemption for leave encashment?

In April 2023, the limit on tax exemption for leave encashment was increased to ₹25 Lakhs. Any leave encashment amount beyond this limit is taxable and the calculation is done considering Section 10(10AA) of the Income Tax Act.

What is the leave encashment formula?

Leave encashment can be calculated basis of the following formula: [(Average Basic salary + Average Dearness Allowance) / 30] * No. of Earned Leaves

What is the difference between leave salary and leave encashment?

Leave salary and leave encashment are both part of the leave benefits an employee is entitled to. Leave salary is defined as the payment given to the employees when they are on leave. Leave encashment is the process where the employee is paid for their unutilised or unused leaves.

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Karnataka Holidays List – 2024 https://razorpay.com/payroll/learn/karnataka-holidays-list-2024/ https://razorpay.com/payroll/learn/karnataka-holidays-list-2024/#respond Fri, 06 Sep 2024 10:07:22 +0000 https://razorpay.com/learn/?p=13214 Karnataka Government Holidays List List of holidays as applicable in Karnataka, including Bangalore/Bengaluru, Mysore/Mysuru, Mangalore/Mangaluru, Hubli, Dharwad, Hubli, etc. Month Date Day Holiday January 1 Monday English New Year’s Day January 26 Friday Republic Day March 8 Friday Maha Shivratri March 25 Monday Holi (optional holiday) March 29 Friday Good Friday April 9 Tuesday Ugadi [...]

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Karnataka Government Holidays List

List of holidays as applicable in Karnataka, including Bangalore/Bengaluru, Mysore/Mysuru, Mangalore/Mangaluru, Hubli, Dharwad, Hubli, etc.

Month Date Day Holiday
January 1 Monday English New Year’s Day
January 26 Friday Republic Day
March 8 Friday Maha Shivratri
March 25 Monday Holi (optional holiday)
March 29 Friday Good Friday
April 9 Tuesday Ugadi (Kannada New Year)
April 11 Thursday Eid ul Fitr
April 14 Sunday Tamil New Year & Ambedkar Jayanti
April 21 Sunday Mahaveer Jayanti
May 1 Wednesday Labour Day / May Day
May 10 Friday Basava Jayanti
June 17 Monday Bakrid / Eid al Adha
July 17 Wednesday Muharram
August 15 Thursday Independence Day
August 26 Monday Krishna Janmashtami (optional holiday)
September 7 Saturday Ganesh Chaturthi
September 16 Monday Eid e Milad
October 2 Wednesday Gandhi Jayanti
October 11 Friday Ayudha Pooja
October 12 Saturday Vijaya Dasami
October 17 Thursday Maharishi Valmiki Jayanti (optional holiday)
October 31 Thursday Deepavali
November 1 Friday Kannada Rajyotsava and Deepavali
November 2 Saturday Deepavali
November 18 Monday Kanakadasa Jayanti
December 25 Wednesday Christmas Day

 

RazorpayX Payroll – India’s Only Fully Automated Payroll and HRMS

A payroll software designed to simplify payroll for employer and employee. Here’s a sneak peak into what RazorpayX Payroll can do for you.

Want to know more? Explore RazorpayX Payroll, or speak with our payroll experts.

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FAQs

When are diwali holidays in Bangalore 2024?

Bangalore celebrates Diwali between October 31st and November 2nd. November 1st is also celebrated as Kannada Rajyotsava.

When is pooja holidays in Karnataka 2024?

October 11th and 12th are celebrated as Pooja holidays in Karnataka. October 11th is Ayudha Pooja and October 12th is Vijaya Dasami. Both days are bank and government holidays.

What is Karnataka government leave policy?

Karnataka government mandates 18 days annual leave, and 12 days sick leave per year. The maximum annual leaves that can be carried forward is 30 days.

How many days maternity leave is allowed in Karnataka?

Karnataka government mandates 6 months minimum paid leave for pregnancy. This leave can be taken up to 8 weeks before the expected delivery date and the remainder after delivery. For adoption, a female employee is entitled to 12 weeks of paid leave, starting from the date of adoption. In the case of surrogacy, the policy typically mirrors the maternity leave entitlements, offering 26 weeks of paid leave for the biological mother.

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Tamil Nadu Holidays List – 2024 https://razorpay.com/payroll/learn/tamil-nadu-holidays-2024/ https://razorpay.com/payroll/learn/tamil-nadu-holidays-2024/#respond Wed, 04 Sep 2024 05:43:30 +0000 https://razorpay.com/learn/?p=13110 Tamil Nadu Government Holidays List List of holidays as applicable in Tamil Nadu, including Pooja holidays, Diwali holidays, Christmas and more, for Chennai, Coimbatore, Salem, Tiruchirapalli, Madurai. Month Date Day Holiday January 1 Monday English New Year’s Day January 26 Friday Republic Day March 8 Friday Maha Shivratri March 25 Monday Holi (optional holiday) March [...]

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Tamil Nadu Government Holidays List

List of holidays as applicable in Tamil Nadu, including Pooja holidays, Diwali holidays, Christmas and more, for Chennai, Coimbatore, Salem, Tiruchirapalli, Madurai.

Month Date Day Holiday
January 1 Monday English New Year’s Day
January 26 Friday Republic Day
March 8 Friday Maha Shivratri
March 25 Monday Holi (optional holiday)
March 29 Friday Good Friday
April 9 Tuesday Ugadi or Kannada New Year
April 11 Thursday Eid ul Fitr
April 14 Sunday Tamil New Year & Ambedkar Jayanti
April 21 Sunday Mahaveer Jayanti
May 1 Wednesday Labour Day / May Day
May 10 Friday Basava Jayanti
June 17 Monday Bakrid / Eid al Adha
July 17 Wednesday Muharram
August 15 Thursday Independence Day
August 26 Monday Krishna Janmashtami (optional holiday)
September 7 Saturday Ganesh Chaturthi
September 16 Monday Eid e Milad
October 2 Wednesday Gandhi Jayanti
October 11 Friday Ayudha Pooja
October 12 Saturday Vijaya Dasami
October 17 Thursday Maharishi Valmiki Jayanti (optional holiday)
October 31 Thursday Deepavali
November 1 Friday Kannada Rajyotsava and Deepavali
November 2 Saturday Deepavali
November 18 Monday Kanakadasa Jayanti
December 25 Wednesday Christmas Day

 

Note that some holidays may vary by region or specific observance. Local festivals, elections, or unforeseen events may also lead to additional holidays.

RazorpayX Payroll – India’s Only Fully Automated Payroll and HRMS

A payroll software designed to simplify payroll for employer and employee. Here’s a sneak peak into what RazorpayX Payroll can do for you.

Want to know more? Explore RazorpayX Payroll, or speak with our payroll experts.

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FAQs

When do Diwali holidays begin 2024?

In Tamil Nadu, October 31st (Thursday) is a government holiday on account of Diwali. Some workplaces might offer November 1st as a holiday as well to allow employees to celebrate Diwali.

When is pooja holidays in Tamil Nadu 2024?

October 11th is celebrated as Ayudha Pooja, and October 12th is Vijaya Dasami, marking the end of Navratri. Both days are government and bank holidays.

How many days leave in Tamil Nadu?

Public employees in Tamil Nadu are entitled to 12 days of casual leave and additional leaves such as medical leave or maternity leave. For private employees, the number of leaves is determined by the individual organizations, but are generally entitled to at least 12 days of casual leave.

How much maternity leave is mandated in Tamil Nadu?

For the first two children, mothers can take up to 26 weeks of paid maternity leave. For the third child onwards, mothers are entitled to 12 weeks of paid leave. For adoption or surrogacy, mothers are entitled to 12 weeks of leave for a child below three months. In the case of a miscarriage, mothers are entitled to 6 weeks of paid leave. There are also laws to support nursing mothers - mandating two breaks of 15 minutes each until the child is 15 months old.

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Leave Approval Letter – Templates, Samples https://razorpay.com/payroll/learn/leave-approval-letter/ https://razorpay.com/payroll/learn/leave-approval-letter/#respond Wed, 21 Aug 2024 10:31:14 +0000 https://razorpay.com/learn/?p=12792 What is a Leave Approval Letter? A leave approval letter is an official communication from the manager to the employee approving time off. A good leave approval letter is an important part of a transparent, well-planned leave management system; it also proves to the employee that the employer cares about their well-being and is supportive [...]

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What is a Leave Approval Letter?

A leave approval letter is an official communication from the manager to the employee approving time off. A good leave approval letter is an important part of a transparent, well-planned leave management system; it also proves to the employee that the employer cares about their well-being and is supportive of their request for time off.

Good leave management is important because it helps managers with optimal resource allocation and a well-planned system without bottlenecks. Below, you will find tips and tricks on how to write a great leave approval letter and pre-written, editable templates for you to download and use.

Format of a Leave Approval Letter

Here are the important elements of a leave approval letter:

  1. Approval of time off: Begin the letter by stating that the employee’s leave has been approved.
  2. Confirm leave details: Confirm the start and end dates of the leave, as well as the total number of days and briefly reiterate the reason for the leave as stated in the employee’s request.
  3. Work Arrangements: Mention any specific arrangements made for covering the employee’s workload during their absence.
  4. Pre and post-leave duties: Mention any duties or responsibilities the employee has to carry out before or after their leave. For example, an ongoing project might need to be handed over to a colleague.
  5. Contact Information: Provide your contact information for any questions or concerns.
  6. Closing: Use a formal closing, such as “Sincerely” or “Regards.”

How to Write a Leave Approval Email

A good leave approval email should be transparent, professional and sensitive. It’s an important tool in making your employees feel valued and cared for.

  • Subject Line: Clearly state the subject, such as “Leave Approval for [Employee’s Name].”
  • Salutation: Greet the employee formally, such as “Dear [Employee’s Name].”
  • Approval: Directly state that the leave is approved.
  • Company leave policy: State the company leave policy and mention any specific requirements like a doctor’s note, notice periods, etc.
  • Work Arrangements: Mention any specific arrangements made for covering the employee’s workload during their absence.
  • Contact Information: Provide your contact information for any questions or concerns.
  • Closing: Use a formal closing, such as “Sincerely” or “Regards.”
  • Your Name and Position: Include your name and your position within the company.

Leave Approval Letter Templates

Vacation Leave Approval Letter Template

Subject: Vacation leave approval for [Employee’s Name]

Dear [Employee’s Name],

This email is to confirm your approval for a vacation leave from [Start Date] to [End Date], a total of [Number] days.

As per our company’s leave policy, you are entitled to [Number] days of paid vacation per year. Please note that [mention any specific requirements, such as a doctor’s note for medical leaves or notice periods].

To ensure a smooth transition, we have made the following arrangements to cover your workload during your absence: [mention any specific arrangements made].

Do enjoy your vacation, and if you have any questions or require further assistance, please do not hesitate to contact me at [Your Email] or [Your Phone Number].

Sincerely,

[Your Name]
[Your Position]
[Company Name]

Download Vacation Leave Letter Template

Sick Leave Approval Letter Template

Subject: Sick leave approval for [Employee’s Name]

Dear [Employee’s Name],

This email confirms your approval for sick leave from [Start Date] to [End Date], a total of [Number] days.

As per our company’s leave policy, you are entitled to [Number] days of sick leave per year. Please ensure that you provide any necessary medical documentation once you are healed and well.

To ensure a smooth transition, we have made the following arrangements to cover your workload during your absence: [mention any specific arrangements made].

Please take the time to recover. If you need any help, please do not hesitate to contact me at [Your Email] or [Your Phone Number].

Sincerely,

[Your Name]
[Your Position]
[Company Name]

Download Sick Leave Letter Template

Unplanned Leave Approval Letter Template

Subject: Unplanned leave approval for [Employee’s Name]

Dear [Employee’s Name],

This email is to confirm your approval for an unplanned leave from [Start Date] to [End Date], a total of [Number] days.

We understand that unforeseen circumstances can arise, and we appreciate your timely communication regarding your need for leave.

To ensure a smooth transition, we have made the following arrangements to cover your workload during your absence: [mention any specific arrangements made].

If you have any questions or require further assistance, please do not hesitate to contact me at [Your Email] or [Your Phone Number].

Sincerely,

[Your Name]
[Your Position]
[Company Name]

Download Unplanned Leave Letter Template

Leave Approval Letter vs No Objection Certificate (NOC)

While both leave approval letters and no objection certificates (NOCs) are related to granting permission for an employee to be absent from work, they serve distinct purposes.

Leave Approval Letter

  • Purpose: Primarily used to formally authorize an employee’s request for leave, whether it’s for vacation, sick leave, or personal reasons.
  • Content: Typically includes the employee’s name, leave dates, reason for leave, and any specific arrangements made for covering their workload.
  • Focus: Primarily on the employee’s absence from work and the company’s approval.

No Objection Certificate (NOC)

  • Purpose: Issued to confirm that an employee has the company’s permission to engage in an external activity, such as further education, a second job, or personal travel.
  • Content: Usually includes the employee’s name, the nature of the external activity, and a statement indicating the company’s approval.
  • Focus: On the employee’s external activity and the company’s consent.

In summary, a leave approval letter focuses on granting permission for an employee to be absent from work, while a no objection certificate focuses on granting permission for an employee to engage in an external activity.

Importance of Good Leave Management System

A robust leave management system is a vital component of any organization, providing significant benefits to both employees and employers. Here are some key reasons why:

Benefits for Employees:

  • Efficient Leave Requests: Employees can easily request leave, track their leave balances, and view their leave history, saving time and reducing administrative hassle.
  • Transparent Policies: A clear and accessible leave policy ensures that employees understand their entitlements and any associated requirements, promoting fairness and consistency.
  • Improved Work-Life Balance: Effective leave management systems can help employees better manage their work and personal commitments, leading to increased job satisfaction and reduced stress.

Benefits for Employers:

  • Enhanced Productivity: A well-managed leave system helps to ensure that the workload is distributed fairly among employees, minimizing disruptions to operations and maintaining productivity.
  • Cost Savings: By automating leave processes and reducing manual tasks, organizations can save time and resources.
  • Improved Compliance: A good leave management system can help organizations comply with labor laws and regulations, reducing the risk of legal issues.
  • Data-Driven Insights: Leave management systems can provide valuable data on leave usage patterns, helping organizations identify trends and make informed decisions about their leave policies.

By investing in a quality leave management system, organizations can improve employee satisfaction, enhance operational efficiency, and ensure compliance with relevant laws and regulations.

Automated Leave Management and Attendance Software

Modern payroll and HRMS tools like RazorpayX Payroll have modules to automate your entire leave management process.

Employees can use the Employee Self Service Module to apply for leave; managers can review and approve the leave instantly from their dashboards, and the software automatically tracks and updates remaining leaves, calculates payroll and more.

Check out RazorpayX Payroll

FAQs

How do I write a leave approval letter?

Clearly state the employee's name and the leave dates. Confirm the approval for the leave. Mention any specific arrangements made for covering the employee's workload. Find pre-written templates in our blog!

How do I reply to a leave request?

You can reply to a leave request with a leave approval email or letter. Either approve or reject the leave request, followed by the reason why and more details. Find out more in our blog!

What is approved leave?

Approved leave is a period of an employee's temporary absence from the workplace that is approved by the employer. It could be for a number of reasons, like sickness, vacation or other unplanned reasons.

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Interview Call Letter Template https://razorpay.com/payroll/learn/interview-call-letter-template/ https://razorpay.com/payroll/learn/interview-call-letter-template/#respond Sun, 18 Aug 2024 18:27:07 +0000 https://razorpay.com/learn/?p=12671 What is an Interview Call Letter? An interview call letter is an official communication sent by the hiring team to a potential candidate, inviting them for an interview. It is a very important letter, usually sent by email, containing details like the date and time of the interview and more. A well-written interview call letter [...]

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What is an Interview Call Letter?

An interview call letter is an official communication sent by the hiring team to a potential candidate, inviting them for an interview.

It is a very important letter, usually sent by email, containing details like the date and time of the interview and more. A well-written interview call letter increases the chances of candidates agreeing to the interview and showing up enthusiastic and well-prepared.

In this blog you’ll find free, downloadable and editable samples of interview call letters for use in your hiring process.

Interview Call Letter Format

A good interview call letter, whether physical or via email, should have the following essential elements.

Applicant details

In the case of a physical letter, start off the letter by including the name, address and phone number of the applicant, followed by the date of sending. Also include the recruiter’s name and details. In case of an email, these details are not required.

Subject

For both email and physical letters, a subject line is mandatory. It catches the attention of the candidate and motivates them to read on. Make your subject line direct and to the point.

Salutation

Before the body, add a formal salutation to greet your candidate.

Note of congratulations

Begin the body of the letter by congratulating the candidate for getting selected for the interview round. Make the candidate feel special and motivated to continue along the hiring process.

Details of the interview

In the case of a remote interview, you can include a video conferencing link or details of how to join the interview remotely. Make sure you choose a video conferencing tool that’s accesssible by everyone.

In case of an in-person interview, include the address to the interview location or a link to a Maps location for easier tracking. Make sure the location is easy to reach and the candidate is aware of the procedure to get access to the office building. Include details like the floor number, room number or name, and the contact details of a POC in case of any questions.

Sign-off

At the end of the body, include a sign-off like yours sincerely, or best, followed by your name, designation and contact details like a phone number or email address. Here you can also mention any attachments that come with the email.

Interview Call Letter Template for Email

Subject: Invitation to Interview for <Position> Role

Dear <Candidate Name>,

We are pleased to inform you that your application for the <Position> role at <Company Name> has been shortlisted for an interview.

We were impressed with your qualifications and experience, and we believe you are a strong fit for our team. We are excited to learn more about you and how your skills can contribute to our company’s success.

We would like to invite you to interview on <Date> at <Time> <Time Zone>. The interview will be conducted via <Video call platform, e.g., Zoom, Google Meet>. You will be speaking with <Interviewer’s Name>, <Interviewer’s Title>.

The interview will last approximately <Duration> and will cover <Brief overview of interview topics, e.g., your background, experience, and how your skills align with the role>.

Please confirm your availability for the interview by <date>. If this time doesn’t work for you, please let us know your preferred times.

We look forward to speaking with you soon!

Best regards,

<Your Name>

<Your Title>

<Company Name>

<Contact Information>

Editable Interview Call Email

Interview Call Template for Postal Letter

<Company Letterhead>

<Date>

<Applicant’s Name> <Applicant’s Address>

Dear <Applicant’s Name>,

We are pleased to inform you that your application for the position of <Job Title> has been shortlisted for an interview.

We reviewed your resume and found your qualifications and experience to be impressive. We believe your skills and background align well with the requirements of this position.

We would like to invite you to an interview on <Date> at <Time> at our office located at:

<Company Address>

The interview is expected to last approximately <Duration>. You will be meeting with <Interviewer’s Name>, <Interviewer’s Title>.

Do bring a copy of your resume and any relevant documents to the interview. We look forward to meeting you and discussing your qualifications further. 

Please confirm your availability for the interview by <date>. If this time doesn’t work for you, please let us know your preferred times.

If you have any questions or require further information, please do not hesitate to contact <Your Name> at <Phone Number> or <Email Address>.

Sincerely,

<Your Name>

<Your Title>

<Company Name>

Enclosure: Interview Schedule

Editable Interview Call Letter

Tips and Tricks for Interview Call

  1. Personalize the letter: Make sure to mention the candidate’s name, and even specific reasons why the candidate was selected for the interview. You could mention a specific skill or experience mentioned in their resume that aligns with the job requirements.For example, you could say, “Your experience in marketing is particularly relevant to this role”. This brings a feeling of achievement and validation for the candidate, building anticipation for the interview, which increases the chances of a positive outcome.
  2. Don’t miss any detail: Include every tiny detail in the first communication to reduce back-and-forth as much as possible. This includes specifying the interview format (in-person, virtual, or phone), the duration of the interview, the names and titles of interviewers, any required documents the candidate should bring and more.
  3. Include a call to action: At the end of your letter, make sure you include a call to action for the candidate, whether it is confirming their availability by replying to the email or letter, or requesting them to bring documents to the interview. This ensures a smooth process and demonstrates your organized approach.
  4.  Maintain a consistent tone: A business formal tone is best when sending interview call letters, but this can vary depending on the work culture within the business itself. It’s important to remain consistent in all comms to the candidate.
  5. Proofread your letter: Make sure you get at least two pairs of eyes to check your letter before you send it out. Check for typos, grammar or syntax errors; mistakes in recipient or sender details, or interview information. Make sure you are not missing out on any information.
  6. Automate the process: Today, most high-growth businesses have automated hiring processes. With templates like the ones you can download in this blog, you don’t need to manually type out the entire letter. This can lead to errors and delays.

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Today, more and more businesses are automating HR processes like hiring, payroll and compliance. With tools like RazorpayX Payroll that can handle all HRMS functions, human errors, delays and stress are a thing of the past.

RazorpayX Payroll is India’s only fully automated payroll and compliance solution, with 45+ HRMS integrations to streamline your entire HR workflow.

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FAQs

What is the purpose of an interview call letter?

An interview call letter is a formal invitation extended to a candidate who has been shortlisted for a job position. It serves multiple purposes: Informs the candidate that they have been selected for an interview. Provides essential details about the interview, such as date, time, location, and interviewer names. Sets expectations for the interview process. Creates a positive first impression of the company.

What information should be included in an interview call letter?

A well-structured interview call letter should contain the following information: Candidate's name and contact details. Job position and company name. Interview date, time, and location (or platform for virtual interviews). Interviewer's name and title. Duration of the interview. Required documents or materials to bring to the interview. Contact information for the recruiter or hiring manager.

What is the best format for an interview call letter?

Both physical and email formats can be effective for interview call letters. The choice depends on the company's preference, the candidate's location, and the urgency of the interview. Physical letter: Creates a more formal and personalized touch. Email: Offers convenience, speed, and a digital record.

How can I personalize an interview call letter?

Personalizing the interview call letter can enhance the candidate experience. Here are some tips: Address the candidate by name. Reference specific qualifications or experiences mentioned in their resume. Highlight how the candidate's skills align with the job requirements. Express genuine enthusiasm for the candidate's application.

What are some common mistakes to avoid when writing an interview call letter?

To ensure a positive candidate experience, avoid these common mistakes: Typos and grammatical errors. Inconsistent or unclear information. Generic and impersonal language. Lack of essential details. Failure to proofread before sending.

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Salary Slip or Payslip – Meaning, Template, Components https://razorpay.com/payroll/learn/salary-slip/ https://razorpay.com/payroll/learn/salary-slip/#respond Thu, 01 Aug 2024 13:08:19 +0000 https://razorpay.com/learn/?p=10173 What is a Salary Slip? A salary slip or payslip, is a document issued by an employer to an employee every month with pay-related details.  It includes information like gross salary, deductions like taxes and contributions, and net pay received. It can be emailed or posted to the employee, and businesses are legally required to [...]

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What is a Salary Slip?

A salary slip or payslip, is a document issued by an employer to an employee every month with pay-related details.  It includes information like gross salary, deductions like taxes and contributions, and net pay received. It can be emailed or posted to the employee, and businesses are legally required to provide payslips as proof of salary payment made.

The salary slip acts as a record of earnings and deductions and is required for applying for loans or proving income.

Most businesses have automated processes in place to automatically create payslips as soon as the salary is sent out. RazorpayX Payroll auto-creates stunning, innovative payslips and sends them to your employees directly on Slack or Whatsapp. Here’s how you can integrate your RazorpayX Payroll software with WhatsApp!

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Components of Salary Slip

Your salary slip typically breaks down your pay into three main components:

  1. Earnings:

    • Basic Salary: Your fixed portion of monthly income.
    • House Rent Allowance (HRA): Allowance for housing expenses, may be partially taxable.
    • Conveyance Allowance: Covers travel expenses related to work.
    • Medical Allowance: Medical allowance is a fixed amount to help cover employees’ medical expenses, separate from any reimbursement claims they might submit.
    • Other Allowances: May include special allowances or bonuses.
  2. Deductions:

    • Professional Tax: State-levied tax on income.
    • Employee Provident Fund (EPF): Mandatory contribution towards your retirement fund.
    • Tax Deducted at Source (TDS): Income tax withheld by the employer.
  3. Net Pay: The final amount deposited into your bank account after deductions.

Salary Slip Format

Earnings

  • Basic salary: The basic salary is the foundation of an employee’s compensation. It’s the fixed amount paid before any bonuses or allowances are added.
  • Dearness Allowance: Dearness allowance is a salary supplement for Indian government employees that combats inflation by increasing with rising living costs. It’s a percentage of their base salary, helping maintain their purchasing power.
  • House Rent Allowance: House Rent Allowance (HRA) is a partial reimbursement for rent paid by salaried individuals in India. It reduces your taxable income if you live in rented housing.
  • Conveyance Allowance: Conveyance Allowance helps salaried people cover commuting expenses to and from work. It’s a fixed amount or a portion of your salary, depending on your company’s policy.
  • Medical Allowance: Medical Allowance is a fixed amount paid by some employers in India to help cover medical bills for you and your dependents.
  • Special Allowance: Special Allowance is a broad category that encompasses various allowances beyond basic salary. It can include things like uniform allowances, shift allowances, or remote work allowances, depending on your company and job.

Deductions

  • Professional tax: Professional tax is a state-level tax deducted from your salary in India. It’s a small direct tax that varies by state and income slab.
  • Tax Deducted at Source: Tax Deducted at Source (TDS) is another tax deducted from your salary by your employer in India. It’s an advance payment towards your annual income tax liability. The TDS rate depends on your income tax bracket.
  • Employee Provident Fund: Employee Provident Fund (EPF) is a retirement savings scheme in India. Both you and your employer contribute a portion of your salary towards this fund. The accumulated amount is then available to you upon retirement or under certain other specific circumstances.

Net Pay

payslip salary slip format Salary Slip – Different Formats

Salary Slip – Excel version

Salary slip – Docs version

Salary slip – PDF

Importance of Salary Slip

A salary slip, also known as a payslip, is more than just a piece of paper detailing monthly earnings:

Proof of Income

The salary slip serves as official documentation of your income and deductions. It’s vital for various purposes, including:

Loan applications

When applying for loans like home loans or personal loans, financial institutions often require salary slips as proof of income to assess your eligibility and repayment capacity.

Visas and travel documents

When applying for visas or travel documents, some countries may request your salary slip as evidence of financial stability.

Rental applications

Landlords may request your salary slip to verify your income and assess your ability to pay rent. A salary slip provides a clear breakdown of your earnings and deductions. This transparency allows employees to:

Verify accuracy

Ensure your employer is calculating your salary and deductions correctly.

Budget effectively

Understand your net income after accounting for all deductions, helping you manage your finances effectively.

Track contributions

Monitor your contributions towards social security schemes like EPF, crucial for your retirement planning. Your salary slip plays a crucial role in filing your income tax return (ITR). It contains essential information like your:

  • Gross salary: Total income before deductions.
  • TDS (Tax Deducted at Source): Tax already deducted by your employer and deposited to the government.
  • Investment proofs: Details of any investments you’ve made for tax deductions.

RazorpayX Payroll software creates stunning, innovative payslips – created by our team of best-in-class designers to give your employees a modern and engaging way to view their financial information.

The payslip is just one of RazorpayX Payroll’s many functionalities and abilities.

Get a Free Demo

Where Can I Find My Salary Slip?

Finding your salary slip depends on your company’s process. Traditionally, it may be:

  • Printed: Handed out physically or left in a designated location.
  • Online: Accessed through a company portal or HR system.

However, modern solutions like RazorpayX Payroll offer innovative methods like WhatsApp integration which allows employees to receive their payslips directly and securely on their phones, eliminating the need for physical copies and enhancing accessibility.

This convenient option simplifies the process and ensures employees have immediate access to their payment information.

Automated Payslips and Payroll

Read More

Basic Salary

FAQs

What is the difference between CTC and in hand?

CTC (Cost to Company) is the total amount your employer spends on you, including your salary, allowances, and benefits. These benefits include health insurance, provident fund contributions and others.  In-hand or gross salary is the amount actually received after deductions. 

How can I check my salary slip?

The method for checking your salary slip depends on your company's specific process. Here are the common options: Physical copies: Traditionally, some companies may distribute paper copies of salary slips to employees. These might be handed out directly, placed in a designated location, or even sent via internal mail. Online access: Many companies have transitioned to online portals where employees can access their salary slips electronically. This typically involves logging into a company portal or HR system using your credentials. Mobile apps: Some companies, especially those utilizing modern payroll solutions like RazorpayX Payroll, offer mobile apps where employees can easily view and download their payslips directly on their smartphones.

Is it important to provide salary slip to employees?

In India, providing a salary slip to employees is not legally mandatory. However, it is considered highly recommended and falls under the domain of "fair labor practices". This is because salary slips are very important documentation for employees to understand their compensation, manage their finances, file for taxes and more.

How can I download my salary slip?

Downloading your salary slip likely involves your company's internal employee portal. If there is one, log in with your credentials and navigate to the payroll or salary section. There should be an option to view and download your paystubs, usually for various months or years. If you can't find it or your company doesn't use a portal, contact your HR department for assistance.

What is the impact of Standard Deduction on Salary Slip?

The standard deduction won't directly appear as a line item on your salary slip. However, it reduces your taxable income. This means a higher portion of your salary escapes income tax, potentially lowering your tax liability. You'll likely see a higher net pay amount on your slip due to the standard deduction being factored into the tax calculations.

What Role Does a Salary Slip Play in Taxation?

A salary slip plays a crucial role in taxation. It breaks down your earnings and deductions, including taxable income and tax deducted at source (TDS). This information helps you understand how much tax has already been withheld and estimate your final tax liability. By analyzing allowances like HRA and deductions like EPF on your slip, you can see how they affect your taxable income. Armed with this information, you can make informed decisions about tax-saving investments or consult a tax advisor for further optimization.

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6 Job Offer Letter Formats https://razorpay.com/payroll/learn/job-offer-letter-format/ https://razorpay.com/payroll/learn/job-offer-letter-format/#respond Thu, 01 Aug 2024 07:10:02 +0000 https://razorpay.com/learn/?p=5687 A job offer letter is a formal document sent to the candidate who successfully clears the selection process for a particular job position.

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What is an Offer Letter?

A job offer letter is a formal written document sent by employers to a candidate selected to fill a particular position. It contains critical information like roles and responsibilities, salary details and start date.

If the candidate is satisfied with the terms detailed in the offer letter, she will sign it and send it back as an acceptance of the job.

If the offer letter contains the following details, it can be considered a legally binding contract:

  • A clear and definite offer of employment
  • A clear acceptance of the offer
  • An exchange of value; salary being exchange for work done

In addition to these essential elements, an offer letter in India must also be in writing and signed by both parties.

Here’s how you can create and manage employee letters on RazorpayX Payroll, using best-in-class templates crafted by our team of experts.
What is included in a job offer letter? 

Employers must ensure that the following critical information is included in the job offer letter:

Job title

The potential employee’s position at work and level of responsibilities after getting selected.

Job description

A written narrative that lists down the core responsibilities, general tasks, and other associated duties.

Starting date

The scheduled date when the new hire is expected to join the company and start working.

Work schedule

The expected volume of work – hours per day or days per week, that the employee must put in at the job.

Reporting structure

The inter-relationship between various authorities within a company. In other words, it describes the hierarchical chain of command – who reports to whom.

Salary

The compensation paid to the employees in exchange for their service. An employer needs to factor in various components of salary while calculating it in India. Typically, it includes base salary, wages, commissions, incentives, etc.

Read more: Salary structure, components, and calculation

Calculating salary is tedious. Unless you use RazorpayX Payroll! Sign up and use the CTC calculator and salary preview tool to generate a salary structure and calculate employee-in-hand salary with only a few details.

Employee benefits

The indirect and non-cash components paid to the employees over and above their salaries.

Privacy policies

A section of the offer letter that discloses how the employer manages customer data and how the prospective employee has to follow it.

Termination conditions

The clause or provision for terminating an employee’s work within an organisation.

Paid time off

The number of days per year that can be used for vacation, sick leave or personal days.

Job Offer Letter Samples

Standard Job Offer Letter Template

This simple, customizable template can be used for any position. Since this is the first official communication your candidate will receive from you, it’s important to add all important details to the offer letter.

 

Email subject line: Congratulations! You have been selected for the role of <job title> at <company name>

Dear <name>,

We are pleased to offer you the position of <title> at <company>. We were thoroughly impressed by your qualifications, experience and interview performance, and we believe you will make a valuable addition to our team.

Job details

  • Job title:
  • Department:
  • Reporting to:
  • Start date:
  • Compensation:

Benefits & perks

  • <list of benefits like health insurance, etc>

Please indicate your acceptance of this offer by signing and returning a copy of this letter by <acceptance deadline>. You can also reach out to <HR POC> at <HR email> or <HR phone number> for any clarification or assistance.

We are excited to have you join our team and look forward to your contributions.

Sincerely,

<HR Manager’s name>
<HR Title>
<Contact information>

standard offer letter template 

Editable Standard Offer Letter Template

Executive Job Offer Letter Template

This is the perfect template for leadership positions. When offering a job to your ideal candidate for an executive position, make sure to use this template and change/add as many details as needed.

 

Email subject line: Congratulations! You have been selected for the role of [Job Title] at [Company Name].

Dear [Candidate’s Full Name],

It is with great pleasure that we extend an offer for the position of [Job Title] at [Company Name]. Your impressive track record and leadership experience align perfectly with our company’s vision and goals.

Job Details:

  • Job Title: [Job Title]
  • Department: [Department]
  • Reporting to: [Supervisor/Manager Name]
  • Start Date: [Start Date]
  • Compensation: [Salary or Compensation Details]
  • Signing Bonus: [Signing Bonus Details]

Benefits and Perks:

  • [List of Executive Benefits and Perks]

Please signify your acceptance of this offer by signing and returning a copy of this letter by [Acceptance Deadline]. Feel free to contact [HR Contact Name] at [HR Contact Email] or [HR Contact Phone Number] for any queries or assistance.

We eagerly anticipate your leadership contributions to our organization.

Warm Regards,

[HR Director’s Name]

[HR Director’s Title]

[Contact Information]

executive offer letter

Editable Executive Offer Letter Template

Internship Offer Letter Template

This is the template to customise when offering an internship to the ideal candidate. Interns are enthusiastic and fresh – this template is the perfect communication to get your candidate onboard.

Email subject line: Congratulations! You have been selected for the role of [Job Title] at [Company Name].

Dear [Candidate’s Full Name],

It is with great pleasure that we extend an offer for the position of [Job Title] at [Company Name]. Your impressive track record and leadership experience align perfectly with our company’s vision and goals.

Job Details:

  • Job Title: [Job Title]
  • Department: [Department]
  • Reporting to: [Supervisor/Manager Name]
  • Start Date: [Start Date]
  • Compensation: [Salary or Compensation Details]
  • Signing Bonus: [Signing Bonus Details]

Benefits and Perks:

  • [List of Executive Benefits and Perks]

Please signify your acceptance of this offer by signing and returning a copy of this letter by [Acceptance Deadline]. Feel free to contact [HR Contact Name] at [HR Contact Email] or [HR Contact Phone Number] for any queries or assistance.

We eagerly anticipate your leadership contributions to our organization.

Warm Regards,

[HR Director’s Name]

[HR Director’s Title]

[Contact Information]

intership offer letter template

Editable Internship Offer Letter Template

Remote Job Offer Letter Template

Work-from-home and remote jobs became popular after the COVID-19 pandemic – remote jobs offer flexibility and allow you to hire top talent from around the world. This is a customizable template for you to send to your candidate.

Email subject line: Congratulations! You have been selected for the role of [Job Title] at [Company Name].

Dear [Candidate’s Full Name],

We are thrilled to offer you the remote position of [Job Title] at [Company Name]. Your skills and expertise make you an excellent fit for our team, and we are excited to have you contribute to our company’s success remotely.

Job Details:

  • Job Title: [Job Title]
  • Department: [Department]
  • Reporting to: [Supervisor/Manager Name]
  • Start Date: [Start Date]
  • Compensation: [Salary or Compensation Details]

Remote Work Setup:

  • [Remote Work Policy and Equipment Details]

Please confirm your acceptance of this offer by signing and returning a copy of this letter by [Acceptance Deadline]. For any inquiries or assistance, please contact [HR Contact Name] at [HR Contact Email] or [HR Contact Phone Number].

We look forward to your valuable contributions as a remote team member.

Best Regards,

[HR Manager’s Name]

[HR Manager’s Title]

[Contact Information]

remote offer letter

Editable Internship Offer Letter Template

Part-time Job Offer Letter Template

Part-time employees offer businesses the flexibility to staff up during busy periods, while also providing workers with the opportunity to balance work with other commitments. When offering a job to a part-timer, you can use this template. Make sure to add any details you feel necessary.

Email subject line: Congratulations! You have been selected for the role of [Job Title] at [Company Name].

Dear [Candidate’s Full Name],

We are pleased to extend an offer for the part-time [Job Title] position at [Company Name]. Your skills and availability make you an excellent candidate to contribute to our team in a part-time capacity.

Job Details:

  • Job Title: [Job Title]
  • Department: [Department]

  • Reporting to: [Supervisor/Manager Name]

  • Start Date: [Start Date]
  • Compensation: [Hourly Rate or Compensation Details]

Part-Time Schedule:

  • [Part-Time Schedule Details]

Please indicate your acceptance of this offer by signing and returning a copy of this letter by [Acceptance Deadline]. Should you have any questions or require assistance, please reach out to [HR Contact Name] at [HR Contact Email] or [HR Contact Phone Number].

We are excited to have you join us in this part-time role.

Warm Regards,

[HR Manager’s Name]

[HR Manager’s Title]

[Contact Information]

part time job offer template

Editable Part Time Offer Letter Template

Part time to Full Time Job Offer Letter Template

Use this template when converting a part time employee into a full time position.

Email subject line: Congratulations! You have been selected for the role of [Job Title] at [Company Name].

Dear [Candidate’s Full Name],

We are pleased to extend an offer for the full-time position of [Job Title] at [Company Name]. We were thoroughly impressed with your performance and skills in a part-time capacity and look forward to your contributions as a full-time employee.

Job Details:

  • Job Title: [Job Title]
  • Department: [Department]
  • Reporting to: [Supervisor/Manager Name]
  • Start Date: [Start Date]
  • Compensation: [Hourly Rate or Compensation Details]

Please indicate your acceptance of this offer by signing and returning a copy of this letter by [Acceptance Deadline]. Should you have any questions or require assistance, please reach out to [HR Contact Name] at [HR Contact Email] or [HR Contact Phone Number].

We are excited to have you join us in this full-time role.

Warm Regards,

[HR Manager’s Name]

[HR Manager’s Title]

[Contact Information]

part time to full time offer letter template

Editable Part Time to Full Time Offer Letter Template

General Job Offer Letter Template

Dear [Employee_Name],

Congratulations! We are pleased to confirm that you have been selected to work for [Company_Name]. We are delighted to make you the following job offer:

The position we are offering you is that of [Job_Title] with an annual cost to company of 330000. This position reports to [Manager_Name].

We would like you to start work on [Employee_Joining_Date]. Please report to [Manager_Name] for documentation and orientation. If this date is not acceptable, please contact me immediately. On joining, you will be invited to our HR tool (XPayroll) in which you may be required to upload your documents.

Please sign the enclosed copy of this letter and return it to me by [Acceptance_Last_Date] to indicate your acceptance of this offer.

We are confident you will be able to make a significant contribution to the success of [Company_Name] and look forward to working with you.

Sincerely,

[HR_Name] [Company_Name]

offer letter sample format

offer letter formatYou can download the above offer letter for free in Word (editable) or PDF format from below. Both versions contain the offer letter format with salary structure.

Download Offer Letter in Word for Free

Download Offer Letter in PDF for Free

Tips for Making Job Offer to Candidate

The rate of drop off after receiving an offer letter is reported to be as high as 80% in some industries. High drop off rates result in waste of time, money and resources – this is why it is so important to give your chosen candidate a good overall hiring experience and top it off with the perfect job offer.

Here are some tips to follow while preparing to offer the job to your chosen candidate so you don’t fall victim to high drop off rates.

  • Be Prompt: Move quickly with your offer once you’ve chosen your candidate. Great candidates can get snatched up by other companies if you wait.
  • Express Enthusiasm: Let the candidate know you’re excited about them joining the team.
  • Clearly Communicate the Offer: Provide a written document outlining the position details, salary, benefits, start date, and anything else relevant.
  • Be Competitive: Research fair compensation for the role and location. While salary is important, consider the total benefits package too.
  • Highlight the Opportunity: Go beyond just the job duties. Explain growth potential, company culture, and exciting perks.
  • Be Open to Negotiation: Be prepared to discuss the offer if the candidate has questions or requests.
  • Follow Up: After the initial offer, check in with the candidate to see if they have any questions and reiterate your enthusiasm for their potential hire.

Automated Offer Letters

RazorpayX Payroll’s automatic offer letter generation feature is a game-changer for businesses of all sizes. It takes the hassle out of creating offer letters, saving you time and resources.

With RazorpayX Payroll, you can generate personalized offer letters in seconds, with just a few clicks.

What’s more, you can use the in-built salary preview tool and CTC calculator to calculate the take-home salary and CTC quickly. All with a few clicks. RazorpayX Payroll automates employee payments and compliance filings like TDS, PF, ESI, PT, and more.

 

Read more:

Payroll Software

What is Payroll

Payroll Process

Payroll Management

HRIS

Leave Attendance Management

Attendance Management System

HR Software

HR Letters

Welcome Letter

Promotion Letter

Experience Letter

Appraisal Letter

Resignation Acceptance Letter

FAQs 

1. How long does HR take to issue a job offer letter?

The time taken depends on several factors. Offer letters containing specific and complicated employee benefits may take a little longer to prepare, possibly a few weeks. Overall, the time taken to roll out offer letters post-selection falls in the range of a few days to two weeks.

2. What is the job offer acceptance rate?

It is a metric that depicts how many of the rolled-out offer letters are accepted by the selected candidates. The acceptance rate is computed by dividing the number of accepted offers by the total number of job offers rolled out. The higher the acceptance rate, the better it is for the employer.

3. Is an offer letter legally binding?

Once a job offer is accepted, it becomes a legal contract between the employer and employee. The employee has the right to the job; however, the employer can revoke the offer under certain conditions mentioned in the Indian Contract Act, 1872. The offer letter may or may not have a fine print or clause in which the employer has explicitly mentioned the consequences of not joining the company.

4. How long is an offer letter valid?

It is usually mentioned in the offer letter or the HR/employer will tell the candidate over the phone or email. Usually, a week is given to candidates to think about the offer.

5. What is the difference between an offer letter and a joining letter?

An offer letter is the first formal document sent to the candidate after clearing all selection rounds. However, it can be turned down by a candidate or passed onto a different candidate by the employer. A joining letter or appointment letter is the final confirmation that the candidate has accepted the offer. Also, the latter is more detailed regarding the role and position.

What is a job offer letter template?

A job offer letter template is a pre-written document that outlines the key details of a job offer. It can be customized to include specific information about the position, salary, benefits, and start date. These templates help companies streamline the offer process and ensure all essential terms are clearly communicated to the candidate.

When should an offer letter be sent?

An offer letter should be sent promptly after you've chosen your top candidate. This shows your enthusiasm and minimizes the risk of them losing interest due to waiting or considering other offers.

Can an offer letter be negotiated?

Yes, an offer letter can be negotiated, It's actually quite common for candidates to discuss the terms, especially salary and benefits. Be prepared to have a conversation and be open to finding a mutually agreeable compensation package.

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Experience Letter – Format, Free Samples & Templates https://razorpay.com/payroll/learn/experience-letter-format/ https://razorpay.com/payroll/learn/experience-letter-format/#respond Thu, 01 Aug 2024 06:02:42 +0000 https://razorpay.com/learn/?p=6537 An experience letter is an official document issued by the employer to the employee as proof of employment with the organisation. Download free experience letter template in word or PDF format here.

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What is an Experience Letter?  

An experience letter is a formal document given to a departing employee as proof of completion of tenure and performance at the company. It contains highly relevant information like assigned roles, skills learnt on the job and a review of the employee’s overall performance. 

While an experience letter is not mandatory when starting a new job, employees may still request one for future reference. An HR manager usually provides experience letters to departing employees, but in smaller businesses, this responsibility may also fall on the business owner.

Here’s how you can create and manage employee letters on RazorpayX Payroll, using best-in-class templates crafted by our team of experts.

What are the Contents of an Experience Letter?

Given below are some important components of an experience letter:

Job Role

The experience letter should clearly state the job role in which the individual was employed. For example, if someone worked as a software engineer in a company for 3 years, it should be mentioned in the experience letter. 

Date of Joining or Starting Work

The date of joining is an important component of the job experience letter. It acts as proof of the duration for which the individual was employed with the organisation. 

Skills and Experience gained

It should specify the work the employee does and the skills they gained on the job. It should also certify any company-funded certifications that the employee received. 

Date of Resignation

The date of resignation is also an important component that specifies the duration of employment. 

Date of issuing the letter

The letter should also include the date of issuance. 

Read more: RazorpayX Payroll’s Toolkit for HRs, with dozens of customizable templates 

How to write a work experience letter?  

Writing an honest experience letter for an employee is essential for the employer. Given below are a few points that you should keep in mind while writing a job experience letter

  • Be Professional – Make sure you stay professional throughout the experience letter, as it establishes your authority as an employer. 
  • Write on your business letterhead – Use your official letterhead to write the experience letter. Include a date, title, designation and company name in the letter. 
  • Include the employee details – Include all the relevant details, such as employee name, designation, employment period, job role, skills earned and employer’s feedback.  

Experience Letter Template


[Company_Name]

[Company_Address]

14/12/2021

Experience Letter

To whomsoever it may concern, this is to certify that <employee’s name> was employed as <job title> in the <department> of <Name of Company> from <Joining date> to <Date of resignation>.

We can confirm <employee’s name>‘s contributions towards the company during his/her tenure have been satisfactory. 

We are sure that their passion and dedication will help them excel in whatever they choose to do next in their life. They have shown a high level of commitment throughout their time with our company.

We wish <employee’s name> all the best for their future.

Sincerely,

[HR_Name]

[HR_Designation]

[Contact details]

Editable Experience Letter Template

Experience Letter Sample


 

ABC Ltd. Company

Hosur Rd, Bengaluru, Karnataka 560030

June 18, 2022

Experience Letter

Mr. Rahul Patodia,

It is to certify that Mr. Rahul Patodia was employed as a Senior Finance manager in the Finance department of ABC Ltd. from June 18, 2019, to June 12, 2022. 

Mr. Rahul has exemplary skills in his field and has knowledge of financial software like Python. Being a Chartered Accountant, he is very attentive to details. He has shown due diligence and commitment towards his work throughout his work tenure.

He was responsible for heading the finance department. His far-sighted decisions helped in the company’s growth. He is a soft-spoken and composed individual, works well under pressure and treats his subordinates well. 

We are sure his passion and dedication will help him excel in whatever he chooses to do next in their life. He has shown a high level of commitment throughout his time with our company. 

We wish Mr. Rahul all the best for their future.

Sincerely,

Shruti Singhania
HR Manager
ABC Ltd.


Automated HR and Payroll Software

RazorpayX Payroll is an industry-first solution to all your HR and Payroll troubles.

  • The ONLY fully-automated payroll compliance software in India
  • Direct salary deposit into employee bank accounts in one click
  •  Simplest reimbursement application and processing workflow
  • Employee management from entry to exit with tools like CTC calculator and offer letter generator
  • Integrations with 45+ tools like Whatsapp, Slack, Zoho People, Darwinbox, etc
  • Time and attendance, leave management and so much more
Read more:

Payroll Software

What is Payroll

Payroll Process

Payroll Management

HRIS

Leave Attendance Management

Attendance Management System

HR Software

HR Letter

Salary Slip

Job Offer Letter

How to Calculate Salary Hike

HR Policies

FAQs

How is an experience letter defined?

The employer issues an experience letter at the time when an employee leaves the company or switches jobs. This letter certifies the employee's duration associated with the organisation and the skills and experiences they gained on the job.

Is an experience letter different from a recommendation letter?

Yes, both are different. While an experience letter is a testament to the period of time an employee worked with the company, a recommendation letter explicitly states all the skills they have and that they would be happy to recommend them to future employers.

Does the experience letter include salary?

While it is not important to include salary amount in an experience letter, it is a good practice as it gives the future employer an idea about the employee’s pay scale at your organisation.

Why is an experience letter important?

An experience letter is a proof of employment and helps build trust and credibility for the employee with his new employer or when pursuing higher education.

What is the difference between experience letter and relieving letter?

An experience letter is proof of the employee's employment at a business, with details of his roles and responsibilities and more. A relieving letter is given to confirm that the employee has resigned from the company.

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