Offer letters: what to put in writing before they accept

By the time an offer is made, both sides have had several conversations and each believes the terms are settled. They usually are not, because conversations leave different residues in different heads. The candidate remembers a figure discussed as a total including a bonus; the employer remembers it as a base salary. Neither is being dishonest, and the disagreement surfaces on the first payday, which is the worst possible moment.

The offer letter's real function is to be the single place where those details are stated once, in a form both parties read before anyone commits. That makes it worth more attention than it usually receives — it is often assembled from a template in a hurry because the candidate is waiting and there is pressure to move fast. The cost of that haste is not immediate. It appears weeks or months later as a dispute about something everyone thought had been agreed, and by then the employment relationship has already started, which makes the conversation considerably harder than it would have been before acceptance.

A small set of details causes almost all subsequent confusion, and each is cheap to state. The job title, which matters to the person's own record and future prospects. The salary, broken into its components rather than given as a single annual figure, so the candidate can see what is fixed. The start date. Who the person reports to, by role and by name. Working hours and location, including whether any remote or hybrid arrangement is a term or a current practice that could change.

Then the terms governing the relationship itself: the notice period each side must give, the probation period and its length, and what happens at the end of probation. If there is a variable component — commission, incentive, annual bonus — it needs its own treatment, covered below. If there are benefits, state which ones and any conditions attached. And if the role requires anything of the candidate before starting, such as documents or a background check, say so in the letter rather than raising it afterwards. Anything you would be uncomfortable stating in writing is generally something the candidate will be more uncomfortable discovering later.

'Variable pay as discussed' and 'benefits as per company policy' are the two phrases most likely to generate a dispute, and both feel efficient when writing the letter. The problem is that they refer to something outside the document — a conversation nobody recorded, or a policy the candidate has never seen and may not be given until after joining.

Variable pay is the acute case, because the amount is significant and the mechanism is easy to remember differently. What the letter needs is the structure rather than a promise of an outcome: what triggers the payment, how it is calculated, when it is paid, and whether it is discretionary. 'Ten per cent of base, paid annually in April, subject to individual and company performance, at the company's discretion' is honest and specific. 'Performance bonus as discussed' invites the candidate to remember it as guaranteed, which is exactly how they will describe it later. The same applies to policy references: if a term matters enough to be part of the offer, either state it in the letter or attach the policy. Referring to a document the candidate cannot read at the moment of accepting is not a term they have agreed to in any meaningful sense.

In common Indian practice these are two different things, though small businesses often use one document for both purposes. An offer letter is an offer of employment on stated terms, which becomes effective when accepted. An employment contract, or appointment letter, is the fuller document governing the relationship once it begins — confidentiality, intellectual property, conduct expectations, grounds for termination, any post-employment restrictions.

Using one document for both is workable for a straightforward role and becomes risky as roles get more sensitive. A person handling customer data, supplier relationships or anything proprietary needs terms that a short offer letter does not naturally contain. What matters practically is that the candidate sees every term before accepting, rather than receiving an offer letter, resigning from their current job, and then being presented with a contract containing restrictions they had not seen. That sequence produces resentment at best and a withdrawal at worst. Whether a particular document is enforceable, and how a specific clause would be treated in your state and circumstances, is a question for an employment lawyer looking at the actual facts. It is not something to settle from a template or a general article, and the cost of one review on a document you will reuse many times is usually modest.

The notice period is the term most often glossed over and most often disputed, because it only matters when the relationship is ending and emotions are involved. State it explicitly for both sides, and state whether it applies during probation, which is frequently different and is where most early exits happen. If you expect payment in lieu of notice to be an option, say so rather than leaving it to be negotiated under pressure.

Probation deserves the same clarity: how long, what happens at the end, whether confirmation is automatic or requires a decision, and what notice applies during the period. A probation clause that says nothing about the confirmation process leaves the employee unsure of their status past the end date, which is a common source of anxiety and a common cause of a good hire leaving. Statutory requirements bear on some of this, and the framework has been changing — India's four labour codes were notified into force on 21 November 2025, which consolidated a large number of earlier statutes. Because obligations vary with the size and type of establishment and with state rules, the specific requirements applying to your business are worth confirming with a professional rather than assuming a template reflects current law.

A written offer sent without a conversation is a common and avoidable mistake. Candidates who receive a letter cold, with no discussion of the number, are far more likely to negotiate by email, to delay, or to use it as leverage elsewhere. A short call explaining the offer, how the salary was arrived at, and what the next steps are, gives the candidate somewhere to ask questions and gives you the chance to hear hesitation while you can still respond to it.

Two practical details. Include a date by which you would like a response, because an open-ended offer can sit for weeks while the candidate waits for another process to conclude, and a stated date is a normal request rather than pressure. And keep the letter readable — an offer written in dense legal language for a shop-floor or administrative role often goes unread, which defeats the point of writing it down. Where the candidate is more comfortable in a language other than English, discussing the terms in that language is worth doing even if the document itself is in English, since a term someone has not understood is not a term they have really agreed to.