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Offer Letter
The letter that turns a decision into an offer. It is not binding until the candidate accepts it, and either side may still walk away, which is exactly what it is for.
- Every commercial term the candidate will ask about, stated once
- The documents to produce and the contracts to sign listed up front
- A template you can reuse across roles by changing the commercials
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- Advice on any recruitment document you have been sent by someone else
- Drafted by experienced lawyers rather than copied off the internet
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What an offer letter is
The written offer a company makes once a candidate has cleared the interviews, and before anything has been agreed.
While running a recruitment process, an organisation needs its hiring documents in place: an employment contract, an offer letter, an appointment letter and a termination notice. One of the essential ones is the offer letter: the written document a company gives a candidate on confirming them for the job they applied for.
It is given after the candidate has cleared every round, and it carries a brief of the designation, the remuneration, the reporting manager, the joining date, the number of paid leaves and the other terms being offered.
There are a great many offer letter formats on the internet. What an employer actually needs to understand is what should be part of one before sending it to a candidate, because the letter is the first written statement of terms the candidate will hold the company to.
- Given to
- The selected candidate
- After the final round
- Given when
- Before acceptance
- Nothing is agreed yet
- Binding
- Not until accepted
- May be revoked
- Yes
- On reasonable grounds, until accepted
- Signed by
- The candidate, to accept
- Drafted on
- Company letterhead
- Followed by
- The appointment letter
- Once the offer is accepted
How LegalWiz.in helps
- A customised offer letter drafted to your requirements
- Advice on any recruitment document you have received from someone else
- Experts who build entire employment document libraries for companies
- Delivered without any geographical boundary
- Thousands of businesses served across every state in India
What the drafting covers
- A consultation call about the role and the terms you are offering
- An offer letter drafted from scratch by an experienced lawyer
- A reusable template so the next hire is a change of commercials
- A review of any recruitment document you have been sent
- Revisions after you have read the draft
Why an employer sends one
It removes the miscommunication
Job responsibilities, pay and perks and any further employment requirements are in one place, so both sides start from the same set of facts.
It builds trust
An organisation that puts an offer in writing reads as one that will put everything else in writing too. Candidates notice.
It shows the company is real
For a candidate leaving a job for yours, a formal letter on a letterhead is the first evidence that the company is what it says it is.
It settles arguments later
Where an issue lingers between the company and the employee, the offer letter is often what resolves it, because it is where the term was first written down.
What an offer letter should include
Five things, and the last is the one most often left out and most often chased afterwards.
The role
The designation being offered and a description of what the job actually involves. A designation with no description is what makes a scope argument possible in month three.
The money
The remuneration in full, the structure and not just the headline number, and the employee benefits that come with it.
When and to whom
The joining date and time, and the reporting manager. Both are questions the candidate will otherwise ask by email the same week.
Leave and notice
The paid leave the role carries and the notice period that will have to be served. Telling a candidate about a three-month notice period after they have accepted is how an offer gets declined late.
What still has to be done
The other employment contracts to be signed and the documents to be submitted at the time of joining. Listing them in the offer is what gets them produced on day one.
Offer letter, appointment letter, contract, relieving letter
Four documents issued at four different moments in one employment. This is the first of them, and it is the only one either side may still walk away from.
| Attribute | Offer letter | Appointment letter | Employment contract | Relieving letter |
|---|---|---|---|---|
| Where it falls in the hiring | ||||
| After selectionOnce the candidate has cleared every round and the employer has decided to hire them, but before anything has been accepted. | After acceptanceAfter the offer has been accepted. It is usually handed over on the first day of joining. | On joiningSigned on or around the joining date, with the rest of the HR formalities, before the employee is assigned any work. | On the last dayAfter the resignation has been accepted and the notice period has been served, on the final day of the employment. | |
| The employerUsually the HR function, on the letterhead. | The employerDrafted on the company letterhead and authorised by the HR manager or employer. | The employerPrepared by the employer and executed by both parties. | The employerOn the company letterhead, signed and authorised by the employer. | |
| Both, to acceptThe candidate signs to accept. Until then it binds nobody, and either side may withdraw. | BothThe employee signs a copy and returns it to the employer, which is what records that the terms were received. | BothIt is a contract, so both parties execute it. | The employer onlyIt is a confirmation issued to the employee rather than an agreement with them. | |
| What is in it | ||||
| The offerDesignation, remuneration, reporting manager, joining date, paid leave, and the documents to be produced on joining. | The appointmentThe position, the salary and benefits, the company policies that apply, and the other terms of the employment. | The full termsRoles and duties, remuneration, probation, confidentiality, intellectual property, non-compete and how either side may end the engagement. | That you have leftThat the resignation was accepted and the employee has been relieved of their duties and responsibilities. | |
| Not until acceptedThe company may withdraw it at any point before acceptance, on reasonable grounds, and the candidate may decline it. | Part of the termsIt records the terms of the employment and is relied on as evidence of them. For a smaller employer it is often the only written terms there are. | YesA legally binding agreement, enforceable in a court, and either party may seek a remedy for a breach of it. | NoA confirmation of a fact. It creates no obligation on either side. | |
| RarelyIt is superseded by the appointment letter. | SometimesAsked for as proof of the designation and the terms held at the previous employer. | RarelyIt is usually confidential and is not normally shown to a subsequent employer, though its notice period governs when the employee may leave. | UsuallyCommonly asked for at the point of joining, as proof that the previous employment was ended properly and no notice period is outstanding. | |
| Next step | Get started | Know more | Know more | Know more |
Swipe the table sideways, Offer letter stays in view. Open any attribute to read the detail behind all 4 answers.
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What is the difference between an appointment letter and an offer letter?
A candidate gets an offer letter on clearing all the rounds of the interview: it means they have been selected and are being offered the job.
An appointment letter is given once they accept the offer. It signifies that they have been appointed to the position.
Does an offer letter mean the job is confirmed?
Ideally, no. An offer letter can be revoked by the company, and it can be declined by the candidate, so receiving one is not an assurance that a job has been secured.
Can the company revoke an offer letter once it has been sent?
Yes, at any time until it is accepted by the candidate. The company will be required to state reasonable grounds for doing so.
Can one offer letter format be used for every role?
The structure can, and that is what we normally draft: a master letter an employer reuses.
The commercial terms cannot. Designation, salary, reporting line, leave and notice period change with the role, and a letter that leaves any of them generic is the one that causes a problem.
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