Salary Deduction Letter due to Employee’s Poor Performance

In any organization, performance is a major matrix to determine whether the person working in the company works diligently or not. A person is said to have poor performance when he does not fulfill the responsibilities he has been assigned. Some people do fulfill their job but the way they perform the job does not meet the standards of the organization they work in.

Every organization wants to hire people who tend to show the best performance. They take many steps to ensure that all the people who work in the company are meeting the standards of the company such as giving certain awards upon showing good performance.

Many people don’t meet the needs of the company because either they are so non-serious with their work or because they don’t like working. So, when an employee does not satisfy his boss, he will be corrected by taking different measures.

What is a salary deduction letter to an employee for poor performance?

This letter is a kind of information letter that informs the employee that his performance is not being liked by the employer and this is the reason, he has deducted the salary of the employee. The salary deduction is a kind of disciplinary action the purpose of which is to make the employee realize that he needs to improve his performance. A person who does not want to lose his job will improve his performance after receiving this letter.

 How to write the salary deduction letter to an employee who does not show a good presentation?

Knowing about writing a professional-looking letter is very important because you don’t want to offend your employer. Below are a few guidelines to let you know how you can get it done:

Inform the employee about deduction:

Since you are writing to let your employee know about the deduction in this formal letter, you should inform as soon as start the letter.

Provide the reason:

If your purpose is to correct the employee, then you should never ignore mentioning the reason. Almost every employee wants to know the reason when he reads about the salary deduction at first. So, provide the reason with some references. If you have seen that the employee is not presenting himself well at a job or you have seen him doing something prohibited at the workplace, you must correct him by specifying the reason.

Mention the deducted amount:

The deducted amount is usually what the employer is allowed to minus from the salary of the employee whenever he violates the policies of the company, you must specify the amount. Usually, it is recommended that you specify the amount in percentage.

Show positivity:

The salary deduction letter is usually seen as something negative that the employee does not like. You can show some expectations from him that will make him positive all over again. Ask him to contact you in case of any question.

Sample letter:

Effective date:

Name of the employee


Subject: Salary deduction due to poor performance

Dear Mr ABC,

I am writing this letter to inform you that the company has decided to deduct your salary. I have been noticing from the previous few months that your performance is no longer up to the mark. You are often late workplace and I have also heard that you don’t pay attention to your work when you are in the office. When I took a round of the office without informing, I found you sitting in your office using a cell phone.

I have warned you so many times that I might take disciplinary action against you if you don’t improve your performance. However, it seems like all my warnings fell on deaf ears. I am so much disappointed to see your bad performance and therefore, I am compelled to deduct your salary. As per the employment contract that you have signed with our company, we can deduct 10% of your salary for the month.

I hope that you will correct your behavior after having seen this disciplinary action against you. If you have any query regarding this letter, you can write me back.  


Name of the recipient

Designation of the recipient



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