Offer Letter

What is an offer letter?

An offer letter, or job offer letter, is a document that an employer gives a candidate that explains the details of the job before they sign a contract of employment. Typically, job offer letters (or employment letters) are less detailed than an employment contract. An offer letter normally includes information about wages, deductions from pay, job duties, and any conditions of employment, such as hours of work.

What does an offer letter include?

The exact contents of an offer letter can vary depending on the employer and position, but it will generally outline the most important terms of the job.

An offer letter may include:

• Job title: The position the candidate is being offered.
• Job duties: A summary of the employee’s main responsibilities.
• Start date: The date the employee is expected to begin work.
• Pay: The employee’s salary or hourly wage, and information about how and when they will be paid.
• Hours of work: The expected working hours or schedule.
• Work location: Where the employee will normally carry out their work.
• Vacation: Information about vacation entitlement or vacation pay.
• Benefits: Details of benefits included with the position, where applicable.
• Probationary period: Information about any probationary period that applies.
• Conditions of employment: Any requirements that must be met before the candidate can begin working.

Including these details in writing helps the employer and candidate have a clear understanding of the position and the terms being offered.

Is an offer letter the same as an employment contract?

No. An offer letter and an employment contract are related documents, but they are not always the same thing.

An offer letter usually provides a summary of the main employment terms so that a candidate can decide whether to accept the job. An employment contract is generally more comprehensive and sets out the rights and responsibilities of both the employer and employee in greater detail.

In some workplaces, the offer letter and employment contract are separate documents. In others, the offer letter itself may contain contractual terms that become part of the employment agreement once accepted.

Is an offer letter legally binding?

Whether an offer letter is legally binding depends on the wording of the document and the circumstances surrounding the offer and its acceptance. An offer letter can contain terms that form part of the agreement between an employer and employee.

For this reason, both employers and candidates should carefully review an offer letter before signing or accepting it. Employers should ensure that the terms are accurate and comply with applicable employment standards, while candidates should make sure they understand what they are agreeing to.

What should you check in an offer letter?

Before accepting an offer letter, candidates should make sure they understand the key terms of the position. In particular, check:

• The job title and duties
• Salary or hourly rate
• Hours and schedule
• Start date
• Workplace location
• Vacation entitlement
• Benefits
• Probationary period
• Any conditions attached to the offer

If anything is unclear, ask the employer for clarification before accepting the offer.

An offer letter gives both the employer and candidate a written understanding of the proposed employment arrangement and can help prevent misunderstandings about the terms of the job.

For more information on the differences between employment letters and employment contracts, see the recruitment and hiring section in our HR Glossary.