Salary Deduction Reimbursement Letter

An organization often deducts the salaries of people working in that organization for plenty of reasons. Sometimes, the salary is deducted as a part of disciplinary action. However, sometimes the organization cuts the salary because of the loan the employee has taken and has not paid back. Whatever the reasons for the deduction are, there are some scenarios in which the deducted amount from the salary is reimbursed.

What is a salary deduction reimbursement letter?

When a company decides to compensate the amount that was deducted from the salary of the employee by paying him the entire deducted amount, it writes the salary deduction reimbursement letter to the employee to inform him about it. The purpose of this letter is to let the employee know that his salary which has been deducted is being reimbursed. This is a kind of a letter that pleases the employee a lot and s/he feel good to read that.

When to write this letter?

A scenario in which the company feels the need to write the letter for compensation of the deducted amount, are as follows:

  1. When an employee contributes to a program of the company by paying some amount and the company decides to pay him back.
  2. When the company revises its policies of salary deduction and decides to reimburse deducted salaries of all the employees.
  3. When the employee who previously caused the inconvenience to the company and faced the salary deduction has compensated the company for the loss by paying the amount.
  4. In some organizations, it is a rule to deduct a fraction of the amount from the salary of the month every month. At the end of the job period of the employee, he is given the lump sum in the form of gratuity that helps him after he retires from his job.

Tips for writing deducted salary compensation letter:

The letter written to the employee to inform him about the compensation of the salary that was previously subtracted is very important and therefore, it needs to be written with complete efficiency. Below are some tips to follow:

  1. Before writing this letter, you should be clear in your head that why you have decided to reimburse the salary.
  2. Make a rough outline of the letter to know what to add to this letter. This outline will help you when you start writing by not letting forget any important information.  
  3. Start the letter by starting the employee that the company has decided to reimburse the salary which was previously deducted from the salary of the employee.
  4. Specify the reason for the compensation of the deduction. The reason should be specified in a clear and easy-to-understand tone. Make sure that you provide the reason in only one sentence.
  5. Let the employee know that when he can expect to receive the money you are compensating him for. You should be sure as to when you can make the compensation so that you don’t have to break the commitment with the employee.

The sample letter given below is a quick idea for you to help you in writing a letter to the employee to let him know about the reimbursement. You can use the same letter as it is to save your time.

Sample Letter

Effective date:

Name of the employee


Subject: Salary deduction reimbursement for [X]

Dear Mr. ABC,

The total amount of 1000$ is being reimbursed that was deducted from your salary. You have paid the 1000$ amount that covers your pay period of 5 months of 20XX. Due to all these payments, the company has decided to reimburse the deductions from the salary.

Enclosed is the complete breakdown of the amount indicated above. We would like to inform you that you will receive the reimbursed salary within two weeks. If you want to know more about reimbursement or you have any disagreement with the amount being reimbursed, feel free to contact Mr. XYZ in Finance department. He will be readily available to assist you.


Name of the recipient

Designation of the recipient



File: Word (.docx) 2007+ and iPad
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