What is an offer letter?
After extending an initial verbal offer to your top candidate, it’s time to send an offer letter. Typically sent before contingencies like a background check, but before signing an official employment contract, this letter formally offers a position to a job applicant, summarizes the main terms and conditions of the offer, and provides details about the role and company to help a candidate decide whether or not to accept the offer. It may also serve as a starting point for employment negotiations.
If the candidate accepts your offer, they will sign the letter and return it to you. However, it’s important to understand that an offer letter is not always a legally binding employment agreement. This is typically a separate document that provides detailed legal protection for both parties. Even still, it’s a good idea to have a legal professional review your offer letter before sending it to a potential employee to make sure you’re protected.
What is included in an offer letter?
An offer letter provides a brief overview of the position and company and includes specific job details, such as start date, salary, work schedule and benefits. Since there isn’t a standard format for a job offer letter, feel free to reorder the elements described below to fit your company and the roles you’re hiring for.
To convey professionalism and authenticity, use your company’s official letterhead with a high-resolution image of your company logo. This is a good way to encourage a potential employee to keep reading and seriously consider your offer.
Date and contact information
In the upper left-hand corner, include the date, the candidate’s first and last name, and their address:
Candidate First and Last Name
City, Province, Postal Code
Greeting / opening line
Start your offer letter by addressing the potential employee using “Dear,” followed by their first and last name. Congratulate them and express enthusiasm in offering them the job with a positive, upbeat opening line, such as: “We are excited to offer you a position at [Company Name]!” You can make this opening line as formal or casual as you like, depending on your company’s culture.
Begin your letter with specifics about the position, as well as work logistics. This should include the formal title of the position, the anticipated start date, full- or part-time status, the office location, their manager/supervisor, and a brief description of the role and its responsibilities. This gives the candidate an idea of what to expect and helps clarify any details that may have been misunderstood or overlooked during the interview process.
If the job offer is contingent upon the candidate completing certain documents or performing certain tasks, mention this in the letter. These contingencies might include a background check, drug test, signed confidentiality agreement, reference checks or proof of employment eligibility.
Use the offer letter to clearly explain the compensation package. Include specific details about how much the candidate will be making on an annual or hourly basis, how often they will get paid, and the available payment methods. You can also touch on equity, bonuses, commission structures, etc. if applicable to the role.
To encourage a candidate to accept the job offer, summarize the key benefits your company offers. Avoid including too many details, since this is better suited for an orientation package or employee handbook. In the offer letter, you might briefly mention attractive benefits, such as:
- Insurance coverage
- Registered Retirement Savings Plan
- Paid time off
- Flexible spending accounts
- Educational assistance
- Flexible work hours
- Work from home options
When wrapping up your letter, decide if you want to put an expiration date on the offer. A hard deadline will save you from losing other qualified candidates if the prospect decides to decline your offer. If you choose to include a time limit, give the candidate at least one week to consider the offer and make a final decision.
End your offer letter by expressing excitement about welcoming the candidate to the team. Provide contact information in case they have questions, and include a line for the candidate to sign and date the offer if they choose to accept.
To reduce any confusion, consider including a brief disclaimer to explain that the letter is informational and not a legally binding contract or agreement. Consult a lawyer to avoid using language that carries contractual implications.
Job offer letter template
Candidate First and Last Name
City, State, Zip
Dear [Candidate Name],
We are pleased to offer you the [full-time, part-time, etc.] position of [job title] at [company name] with a start date of [start date], contingent upon [background check, drug test, etc.]. You will be reporting directly to [manager/supervisor name] at [workplace location]. We believe your skills and experience are an excellent match for our company.
In this role, you will be required to [briefly mention relevant job duties and responsibilities].
The annual starting salary for this position is [dollar amount] to be paid on a [monthly, semi-monthly, weekly, etc.] basis by [direct deposit, check, etc.], starting on [first pay period].
In addition to this starting salary, we’re offering you [discuss stock options, bonuses, commission structures, etc.].
As an employee of [company name], you are also eligible for our benefits program, which includes [medical insurance, RRSP, vacation time, etc.], and other benefits which will be described in more detail in the [employee handbook, orientation package, etc.].
Please confirm your acceptance of this offer by signing and returning this letter by [offer expiration date].
We are excited to have you join our team! If you have any questions, please feel free to reach out at any time.
[Your Printed Name]
[Your Job Title]
Printed Name: ___________________________