Offer Letter Format — Free Sample & Word Template

Offer letter or appointment letter?

The two are distinct and the distinction is worth keeping. An offer letter proposes the role and its principal terms and takes effect when the candidate accepts; an appointment letter is issued once they join and sets out the full terms of employment, typically including leave, working hours, code of conduct and termination in more detail.

Many Indian startups collapse the two into one document, which is perfectly workable as long as the single document is complete. What does not work is issuing a two-paragraph offer with a CTC figure and never following it with anything — which leaves the actual terms of employment undocumented for the people who joined you earliest and matter most.

An offer and acceptance exchanged by email can form a valid contract, and electronic records are recognised under the Information Technology Act, 2000. Keep the accepted copy regardless: a signed and returned scan, or a clear written acceptance, filed with your records.

What the letter has to contain

At minimum: the role, the reporting line, the start date, the place of work, the compensation, the probation and notice periods, and confidentiality and intellectual property terms. Beyond that, four things are worth getting right because they are expensive to fix later.

CTC, with the structure in an annexure

State the total cost to company in the letter and put the breakdown — basic, allowances, employer contributions, any variable component — in an annexure. Candidates consistently read CTC as take-home, and the gap between the two is the single most common source of a bad first month. Our CTC calculator works the split and shows its arithmetic.

Probation and notice, stated explicitly

Probation is a matter of contract rather than a statutory requirement, and three to six months is the common range in Indian startups. Both probation and notice periods are also touched by the applicable state Shops and Establishments legislation, which varies — so state your terms in the letter rather than leaving them to be implied, and check the position for your state.

Confidentiality and IP assignment

The clause you cannot skip. See below.

Conditions attached to the offer

Background and reference verification, proof of right to work, and relieving documentation from the previous employer. If the offer is conditional, say so in the offer rather than raising it after acceptance.

IP assignment: the clause that shows up in diligence

If an employee or contractor writes code, designs a product or produces content for you, you want the resulting intellectual property to belong to the company. An express assignment in the engagement document is what puts that beyond argument.

This matters far beyond the employment relationship itself. Investors and acquirers run IP chain-of-title checks in diligence, and a gap — a freelancer who built your first version with no assignment, an early employee who never signed anything — is genuinely difficult to fix retrospectively, because by the time you discover it the leverage has moved to the other side. A former contractor who is asked to sign an assignment four years later, mid-acquisition, is in a strong negotiating position.

The position differs between employees and independent contractors, which is another reason the employee-versus-consultant classification below is not merely a labelling question.

Employee, intern or consultant — get the category right

Startups often engage people as 'consultants' to avoid payroll administration while treating them, in substance, as employees: fixed hours, direct supervision, integrated into the team, no other clients. The label on the document does not settle the question if the reality is different.

Misclassification carries consequences on both sides. The TDS treatment differs — salary is deducted under Section 192 on the basis of estimated annual income, while professional fees fall under Section 194J — and statutory contributions, gratuity and leave entitlements follow employment rather than the contract's heading. Getting it wrong builds a contingent liability that surfaces in diligence or when the relationship ends badly.

Choose the category honestly and use the matching document. This generator changes the letter's substance rather than only its heading: the consultant version drops probation and employee-benefit language, provides for termination on notice rather than a notice period in lieu, and states expressly that no employment relationship is created.

Mentioning ESOPs without creating a problem

Equity is one of the main reasons a candidate joins an early-stage company at below-market cash, so it belongs in the conversation. It belongs in the offer letter more carefully.

Only promise options if a pool actually exists and has been approved through the proper corporate process. A promise in an offer letter that is not backed by an approved scheme is a commitment you may not be able to honour on the terms stated, and the mismatch typically surfaces at the worst time — during a funding round, when the cap table is being reconciled line by line.

Keep the grant terms out of the offer letter and in a separate grant letter: number of options, vesting schedule, cliff, exercise price, exercise window and what happens on exit or on leaving. A vague equity sentence in an offer letter — '0.5% equity after one year' — is a recurring source of founder-employee disputes precisely because it is silent on all of those.

What goes wrong

CTC stated without a breakdown

The candidate reads it as take-home, the first payslip is materially lower, and the relationship starts with a dispute. Put the structure in an annexure.

No IP assignment

Discovered in diligence, years later, with no leverage left. See above.

Calling an employee a consultant

The contract heading does not determine the classification. Substance does.

Silence on notice during probation

Founders state a post-confirmation notice period and say nothing about probation, then discover there is no agreed process for the case that actually arises early.

Verbal equity promises

If it is not in a grant letter with vesting terms, it is not a grant — it is a disagreement waiting for a liquidity event.

Never issuing the appointment letter

The offer is accepted, the person joins, and the full terms are never documented. Either issue both, or make the single document complete.

Offer and appointment letters under the new Labour Codes

India's four Labour Codes — on wages, industrial relations, social security, and occupational safety, health and working conditions — came into force on 21 November 2025, replacing 29 older labour laws. For hiring paperwork, the change founders notice first is that employers must now give workers a written appointment letter.

The second is how pay is structured. Under the Code on Wages, 2019, if the allowances left out of "wages" add up to more than half of total pay, the excess is counted back into wages. Since provident fund and gratuity are worked out on wages, a CTC with a very low basic can cost more than it used to. Build the salary breakup with that in mind.

The Codes also bring fixed-term employment into the main framework, with fixed-term employees entitled to the same benefits as permanent staff doing the same work. States are still notifying their own rules, so treat this as a starting point and check the current position with your payroll or HR adviser.

Offer letter formats by type of role

The generator switches between employee, intern and consultant wording, and samples of the intern and consultant versions are on this page. Here is what should change for each kind of hire.

Experienced hire

Full-time wording. Make the conditions explicit — relieving letter from the previous employer, background verification — and match the notice period to seniority.

Fresher

Full-time wording, usually with a longer probation and a clear training period. State any bond or training-cost recovery plainly if you have one — and keep it reasonable.

Intern

Say "internship", give the duration and the stipend, and say whether a certificate or a full-time offer may follow. Do not use employment language you do not mean.

Fixed-term or contract employee

Full-time wording with a fixed end date. Under the Labour Codes a fixed-term employee gets the same benefits as a permanent one doing the same work.

Consultant or freelancer

An engagement letter, not an employment offer: fees against invoice, their own taxes, no probation and no employee benefits.

How to show CTC in an offer letter

Put the annual CTC in the letter and the breakup in an annexure. That keeps the letter readable and gives both sides one place to check what was promised. The example below is illustrative arithmetic for a ₹6,00,000 CTC — not a recommended structure.

Basic is set at half of CTC here, which keeps allowances within the Labour Codes' 50% line. The employer PF figure assumes the common practice of contributing 12% on a wage capped at ₹15,000 a month; your payroll provider will confirm what applies to you.

Offer letter email format

Most offers now go by email with the letter attached. Keep the email short — the letter carries the terms — and ask for a written acceptance by a date.

Got an offer letter? What to check before you accept

Read it against what you were told in the interview. Check the job title, the joining date, the CTC and — if it is attached — the salary breakup, the probation and notice periods, and any conditions such as background verification or a relieving letter. If something promised verbally is missing, ask for it in writing before you resign from your current job.

Be wary of fake offer letters. Warning signs include being asked to pay a fee for training, equipment or "processing", an offer with no real interview, a sender using a free personal email address instead of the company's domain, and pressure to accept within hours. A genuine employer does not charge you to join.