An offer letter is the correspondence a hiring manager sends to a candidate when offering them a job. Although offer letters typically include basic information like the job description and compensation, the true goal of an offer letter is to convince a candidate to accept the position. For that reason, offer letters should clearly state the benefits of the role and make it easy for the recipient to accept.
A free offer letter template is included below. You can also download it as a Word document.
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What To Include in an Offer Letter
Offer letters can differ depending on the company, industry, and type of role. However, there are a few elements that are usually included in a formal offer letter.
Start each offer letter with the date, a salutation, and the candidate’s full name. The beginning of the letter will set the tone of the offer and should mirror your corporate culture so start with something enthusiastic but professional.
Company Name & Logo
Likewise, make sure the company name is clearly identified at the top of the letter. Drafting the offer letter on the official company letterhead will make the letter look more official and signal to the recipient that it’s a legitimate offer.
Job Title & Description
Include the formal job title at the beginning of the letter so the recipient knows exactly what is being offered. This should match the job title used throughout the hiring process; if there are any differences, the letter should explain those differences and why the title is different. Likewise, the letter should identify the reporting structure for the role, provide details about general responsibilities, and state whether the role is full time vs part time and office-based vs remote.
Once you provide the job title and a brief description of the role being offered, detail how the employee will be compensated. This section of the offer letter should state the annual salary or hourly wage and how frequently the employee will get paid—weekly, biweekly, or otherwise. You can also use this portion of the offer to describe any additional compensation like equity or performance-based bonuses.
A job’s benefits package is, in many cases, just as important to candidates at the salary amount. For that reason, it’s important to include a summary of benefits in the cover letter. If you have access to summary documents from your company’s benefits providers, you can also include this as an attachment when sending the offer letter.
Where applicable, you can include general information about benefits in the offer letter:
- Insurance coverage
- 401(k) plan
- Paid time off
- Flexible spending accounts
- Educational assistance
- Flexible work schedule
- Work from home
Keep in mind, however, that some hiring managers prefer to save specific details about the benefits package for the employment contract.
With a few exceptions, at-will employment means that a company or employee can terminate employment at any time and for any reason. Every state is at-will with the exception of Montana, so if your business (or new employee) is not located in Montana, you can include at-will language in your offer letter. As with the benefits summary, many employers choose to reserve this language for the employment agreement. Either way, we recommend you work with a legal professional to ensure you include all of the necessary language.
Job offers that are contingent on any further reviews or requirements should list these items clearly and in an obvious location so the recipient is guaranteed to see them. Depending on the type of job, this may include a background check, credit review, drug test, or other evaluation. If there are contingencies, you should also include information about the next steps and whether you require any immediate action from the candidate.
Oftentimes, a hiring manager will discuss the employee’s availability during the interview process. However, an official start date should be identified in the offer letter even if you already discussed it with the candidate. If the start date is dependent on offer contingencies, state that in the letter and provide the date by which those additional requirements must be met.
Offer periods are important, because they give candidates time to consider the job offer, discuss it with family members, and compare it with other competing offers. Requiring a recipient to respond within a certain period also keeps the hiring process on track and enables you to move on to other candidates if your first choice declines. In general, offer periods range from 24 hours up to one week—but you can always choose a period of time that makes sense for the role and hiring timeline.
Method of Acceptance
In addition to letting candidates know how long they have to accept an offer, provide details about how they should accept or decline the offer. Including this information in the offer letter gives your potential employees a sense of confidence and security around the acceptance process while ensuring you don’t miss their response. Regardless of how you prefer candidates respond to the offer letter, always provide the relevant contact information whether it be your phone number or email address.
Finally, include a section in the offer letter explaining that the letter does not serve as a binding employment contract. An attorney can help you draft this portion of the letter and review the offer in its entirety to ensure you’re not including any contractual language.
When To Send an Offer Letter
An offer letter signals the beginning of the onboarding process. It’s best if you speak with the candidate before having your HR team draft an offer letter. Many companies opt to do a verbal offer, which isn’t as official as a written letter, but gives the opportunity for the hiring manager to gauge the candidate’s interest. Is the salary you have in mind too low? Will the candidate try to negotiate? How much notice do they need to give their current employer? Knowing these things beforehand will prevent you from having to adjust the letter later.
How To Send an Offer Letter
Once you talk to your potential employee about the offer, send an email with the full offer details either in the body of the email or as a PDF attachment. In addition to the offer itself, attach any relevant documents that might help them make a decision—such as benefit plan documentation and company policies. This is also a good opportunity to streamline the onboarding process by providing documents the employee needs to complete before their first day.
Who Sends the Job Offer Letter
Where possible, an offer letter should be sent by the hiring manager for the role. This demonstrates to the recipient that the offer is official and represents the company’s willingness to enter into an employment agreement. However, if the candidate has been interviewing with another team member—or if the company’s owner prefers to send offer letters—this is acceptable too. The most important thing is to make the offer clear, concise, and professional.
What To Do After You Send the Offer Letter
With luck, your candidate may accept the job offer immediately—but in many cases, the initial offer may not be the end of the road. For that reason, hiring managers should expect to field questions from the candidate about benefits and other details of the offer. A hiring manager should also prepare to negotiate the terms of the offer—whether it be compensation, vacation time, or other benefits.
To learn more about the other steps you should follow when hiring an employee, check out our guide on how to hire employees.
Preparing and sending an offer letter is an exciting and important phase of hiring. It also sets the tone for the onboarding process and helps the employee understand what to expect moving forward. To ensure candidates have the information they need, draft offer letters with important details like a job description, compensation and benefits, and how to accept or decline the offer.