Salary Increment

What is Salary Increment?

A salary increment is the annual raise an employee receives after a performance appraisal cycle. In India, the median hike sits around 8-10% across industries, with tech and product companies giving 10-15% to top performers and non-tech sectors closer to 5-8%. Promotions usually carry a higher hike (15-25%) on top of the regular increment. Companies issue an increment letter or revised CTC breakup that takes effect from a fixed date, often April 1 or the start of the next financial quarter. Increment is rarely uniform. Top performers get 1.5x the average, average performers get the average, and bottom performers may get 0% or be moved to a PIP.

How Salary Increment is used

Communicate increment letters in private one-on-ones, never on a group email. The conversation matters as much as the number.

Salary Increment FAQs

Is increment guaranteed every year?

No. Most appointment letters say increments depend on company performance and individual performance. In a bad year, companies may freeze hikes.

When does the increment reflect in salary?

Usually the month after the appraisal letter is issued. Some companies pay arrears for the gap between effective date and processing date.

Is the increment taxable?

Yes. The increased CTC raises your taxable income for the year. TDS gets recalculated and adjusted in remaining months.