This paper reports a detailed investigation of magnetic microstructure and magnetic properties in Gd19Fe81 thin films after rapid thermal processing at different temperature viz. 300, 400 and 500 °C for 20 min. While the as-prepared films show stripe domain with high magnetic contrast, the processed samples display a weak magnetic contrast shadowed with topographic feature. The perpendicular magnetic anisotropy observed in the as-prepared sample no longer exists after rapid thermal processing. Magnetization measurements and MFM respectively confirm the increase in saturation magnetization and decrease in perpendicular magnetic anisotropy. Micromagnetic simulations have been performed to understand the domain modification and associated magnetic properties as a function of saturation magnetization, anisotropy value and in-plane tilt of the easy axis.