Income Verification Letter (Templates & Examples)

As a manager or employer, you may occasionally get requests from employees for income verification letters. These letters are usually addressed to a third party, such as a financial institution, and can serve as proof of employment. They confirm the employee’s employment dates, salary information, employment status, and other details.

In essence, what you include in this letter depends on what the third party requires and your company policy. You cannot disclose private information.

Here, we look at the reasons why employees may request this letter. We also review what to include in one and how to draft and send it.

Employees may not always disclose why they need a verification letter. Nonetheless, if they request it, it could be because they are:

• Applying for tenancy
• Applying for an auto loan or mortgage
• Pursuing another employment opportunity
• Requesting a loan payment deferral or reduction

Have the employee explain what details they want to be included in the letter.

State laws regulate what information employers can disclose to third parties. As such, you should study them to determine what to include in your document. You may also need a signed release form from your employee. Here is what a typical verification letter might include:

• Employer address
• Company name
• Requester’s mane and address
• Employee name, job title, job description, and current salary
• Employment dates

Drafting a verification letter for every employee can be tedious and time-consuming. Rather than go through the process repeatedly, here is an employment verification letter template and sample for reference. You can use them to formulate your company’s standard draft.

Proof of Income Letter

This is a piece of written correspondence that is presented to an institution or organization to obtain something. It serves as evidence that you can pay back the loan, travel fund, insurance, or other borrowed entity.

Income Verification Letter for Self-Employed

This letter attests to a self-employed individuals’ income and total years in business. It is written by the individual but needs to be accompanied by official documents by a tax preparer or CPA.

Income Verification Letter for Independent Contractor

An independent contractor is not considered the employee of the company to which they provide their services. This letter can be written to prove their general income or that from individual contracts. It can be provided by a company or drafted by the contractor.

Salary Confirmation Letter

This is a letter to prove positive income. It may be sent to a bank to attest that an individual is capable of paying the loan they are applying. The HR manager often drafts it.

No Income Verification Letter

This letter is used to prove that someone has no income. It involves downloading official forms from the IRS website and information on 1099s or W-2s under your Social Security number. Alternatively, you may obtain Verification of Non-Filing Letter from the IRS.

Both current and former employees can request an employment verification letter. To meet this demand, you need to learn the state laws regarding the dissemination of such information and formulate a consistent drafting process. An income verification letter is a formal correspondence. As such, you should maintain an informational and professional approach. This should prove helpful to the employee and present your company or business in a positive light.