Once you hire someone, the next procedure is sending them an offer letter to set out the basic terms and conditions of hiring and what is expected from the new joiners. An offer letter protects the company from unforeseen circumstances and consequent legal actions. Let’s take a deeper look at what is a job offer letter and the information covered in the same as well as an offer letter format.

What is an Offer Letter?

An offer letter is a formal document sent by an organisation to prospective employees who have cleared all the selection criteria for a particular job vacancy. It lays down that the candidate has been successfully hired and the specified job role that is being offered to the candidate. It also includes the job description, details about the company and the payment terms. Once the offer letter is signed, it becomes a legal contract between the employer and the candidate.

Elements of an Offer Letter

Following are the elements of an offer letter template:

  • Job Title: A job offer letter template has the job position for which the candidate is being hired. The roles and responsibilities will be based on the position for which the candidate is being hired.
  • Job Description: According to the job title, the job responsibilities are being allocated to the candidate. The job description will lay down the job role, duties and responsibilities and what is being expected from the candidate in the job offer letter format.
  • Joining Date: Joining date is the starting date of employment. The candidate is expected to join the employment from the joining date specified in the offer letter.
  • Work Schedule: The offer letter sample lays down the working schedule that the employee must abide by. It includes working hours per day, the number of working days in a week, expected working hours in a week etc.
  • Reporting Structure: The job offer template includes the hierarchy of authority in the organisation. It depicts to whom the employee will be reporting, his seniors and superiors.
  • Salary Details: The offer letter template includes the employee’s salary structure. A detailed salary structure shows the bifurcation (components) of salary, cost-to-company, deductions and in-hand salary that the employee will receive from the organisation. Some of the major payout components include basic salary, dearness allowance, house rent allowance, cash allowances etc. However, only the cash components are covered under this head.
  • Employee Benefits: Apart from salary, an organisation provides various employee benefits. It can range from a simple insurance cover to perquisites like residential accommodation, vehicle etc. It primarily includes the non-cash benefits being provided to the employee.
  • Work Location: A company can have multiple branches located in different cities. The job offer letter mentions the location an employee is being hired for.
  • Privacy Policies: Each company lays down its explicit privacy policies. These are more or less applicable to each and every employee of the organisation. As privacy and confidentiality are crucial for any organisation, this section lays down conditions regarding the privacy terms that employees shall abide by and the consequences of breaking the organization’s privacy policy.
  • Termination Conditions: This includes the policy regarding the employee’s termination, situations that can lead to termination, and the formalities governing the termination.

In a Nutshell

A job offer letter is a formal document; therefore, it is important to craft it properly to avoid ambiguities. With PayU, you can select the best job offer letter format as per your organisation’s needs to ensure that terms are crystal clear when an employee joins your esteemed organisation. You can also use the offer letter format in Word and redraft it as per your needs.


What should an employee do after receiving an offer letter?

After receiving an offer letter, you should go through each and every term and condition carefully and reach out to HR for any discrepancies.

Can negotiation be done after receiving the offer letter?

While most of the negotiations are done at the time of the interview, the terms laid down in the offer letter may differ from what was conveyed at the time of the interview. In other cases where the terms were not discussed at the time of the interview or earlier rounds, you might want to negotiate certain terms like salary, working schedule etc.

How to select a simple job offer letter sample for my organisation?

You can select has multiple job offer templates available online suitable to each organisation’s needs. You can go through the relevant ones and choose.