How do I run a compensation review in Myanmar?

What this looks like in practice

A Myanmar compensation review is the annual exercise of comparing current salaries to market bands and adjusting based on performance, role and budget pool. Best timing is post-30 June (after the annual PIT reconciliation), aligned with FY-end. Outputs: salary-revision letters as ESDL contract addenda, signed by both parties, retained 7 years. Salary increases need a written letter; salary reductions require explicit employee consent under ESDL.

Step-by-step setup

1. Benchmark roles against current Yangon, Mandalay, Naypyidaw salary bands; use 2026 indicative ranges.
2. Set the budget pool — 5–10% of total salary cost is typical for Myanmar SMEs in normal years; less in tight conditions.
3. Score performance from the year-end review; map to a rating-to-increment matrix.
4. Issue salary revision letters as ESDL contract addenda, signed by both parties, effective from a stated date.
5. Update payroll with the new gross; PAYE auto-recalculates per Union Tax Law brackets.
6. Update SSB if the new wage crosses the MMK 300,000 cap (employer SSB stays at MMK 9,000 max).
7. Communicate to employees with a 1:1 conversation; payslip will reflect new pay.

Tools, templates and costs

• Salary band benchmark: cloud HRMS module, market-data subscription, or manual benchmarking sheet.
• Budget pool: 5–10% of total salary cost for normal years; document board approval.
• HR officer time: 5–15 days per cycle depending on headcount.
• Templates: salary band table, rating-to-increment matrix, salary revision letter, board approval memo.

Salary reductions under ESDL

An employer cannot unilaterally reduce salary under ESDL. Reductions require explicit written consent, often as part of a documented business-need consultation (e.g., extended downturn). Without consent, a reduction is grounds for a wrongful-termination claim at the township labour office. The Conciliation Body has historically not accepted unilateral reduction even with notice.

Pitfalls to avoid

• Unilateral salary reduction — wrongful-termination grounds.
• No written revision letter — disputes when memory fades.
• Single national salary band — over-pays in Mandalay, under-pays in Yangon.
• Skipping PAYE recalculation when salary moves bracket.
• No 1:1 communication — letter without conversation lands badly.

Related: performance reviews, budgeting HR costs, and HR across cities.