How to Write an Offer Letter

An offer letter puts a job offer in writing before the person joins. The candidate weighs it against the job they have, often resigns on the strength of it, and keeps it as the record of what they were promised. Most of the trouble with offer letters comes from one figure that meant one thing to the employer and another to the candidate — usually the salary.

What it should say

• The position, the department and the place of work.
• The date of joining, and who the person will report to.
• The pay, as a figure and in words, and whether it is per month or per year. If it is a yearly CTC, say so in those words.
• Probation: how long it is, and that confirmation will be given in writing.
• The conditions of the offer: verification of documents and references, the company’s policies.
• The date to accept by. An offer with no deadline stays open longer than you meant it to.
• Anything that would surprise the person later if it were left out: working hours, the notice period, a transfer clause, the documents to bring on the first day.
• A signature of an authorised person, with their name and designation, on the business’s letterhead, dated and with a reference number — and an acceptance block for the candidate to sign.

CTC, gross and in-hand: say which one

CTC (cost to company) is the employer’s total yearly cost for the person. It includes the employer’s provident fund contribution, and sometimes gratuity, insurance or a bonus, none of which reaches the bank account every month. Gross is the monthly salary before deductions. In-hand, or net, is what is left after the employee’s own PF, professional tax where the state levies it, and income tax.

A letter that says “₹6,00,000” and nothing else will be read as ₹50,000 a month in the hand. It will not be. Name the basis — “per annum (CTC)” or “per month (gross)” — and attach the break-up.

The salary break-up annexure

The break-up is usually a separate sheet attached to the letter, headed “Annexure: Salary break-up” and referred to in the letter itself. A typical one, for an illustrative CTC of ₹6,00,000 a year:

Component	Per month (₹)	Per year (₹)
Basic pay	25,000	3,00,000
House rent allowance	10,000	1,20,000
Special allowance	12,000	1,44,000
Gross salary	47,000	5,64,000
Employer’s PF contribution (12% of basic)	3,000	36,000
Cost to company	50,000	6,00,000

From the gross of ₹47,000, the employee’s own PF contribution of ₹3,000 comes off, so the amount in hand is ₹44,000 a month at most — less where professional tax or income tax applies — and not ₹50,000. That gap is the most common reason a new employee feels misled on the first payday. An annexure like this one closes it before they accept.

How the split is drawn up matters more now that the labour codes are in force. They count wages the same way for PF and gratuity, and if the excluded items — HRA, the employer’s PF contribution and others — come to more than half of total remuneration, the excess is treated as wages. In the example above they come to about a quarter. If your structure keeps basic pay low, check the split before it goes into a signed letter; Your Appointment Letter Template Is Probably Out of Date explains the rule.

Offer letter or appointment letter?

They are different documents, and a business needs both.

The offer letter comes first. It is a proposal, and under section 5 of the Indian Contract Act, 1872, a proposal can be withdrawn before the acceptance is complete, but not after. That is why the accept-by date and the conditions in the letter matter.

The appointment letter is issued when the person joins, and the law requires it: section 6(1)(f) of the OSH Code obliges every employer to issue one to every employee, and rule 6 of the OSH (Central) Rules, 2026 sets out the sixteen particulars it must carry. An offer letter, however complete, does not meet that requirement. The appointment letter format carries all sixteen, in order.

What to leave out

• Promises you have not decided on. A future increment, a bonus “as per performance”, a confirmation date: once it is in the signed letter, it is part of what was agreed.
• “As per company norms” in place of a figure. If the pay is not written down, there is nothing to check the first salary slip against.
• A letter for someone you are not actually hiring. Offer letters are shown to banks, landlords and embassies as proof of a job, so issue one only for a real offer, on terms you intend to honour.

In Hindi, or in both languages

An offer letter can be written in Hindi, and for many roles it should be: the person accepting it should be able to read every line. The offer letter format words the letter in English or Hindi from the position, the joining date and the pay, with the salary in words and an acceptance block at the foot. Fill in the break-up and it adds the annexure on a page of its own, laid out like the table above, with the yearly figures worked out. It downloads as a PDF, or as a Word file you can edit.