How to read an offer letter before you sign it

Getting an offer is exciting, and the temptation is to sign it the same day. Resist it for a few hours. An offer letter is a contract that decides your salary, your notice period, what happens if you leave early and sometimes what you can do in your spare time. Once you have accepted, changing any of it becomes much harder. Reading it properly takes thirty minutes and can save you a lot of trouble.

Offer letter or appointment letter?

In many Indian companies, the offer letter is a proposal of the main terms, often with conditions attached, such as clearing a background check. The appointment letter comes later, usually at joining, and contains the detailed terms of employment. Some companies issue a single combined document. Read whichever you receive just as carefully, and keep a copy of every version.

The basics to check first

• Your name and designation, spelled correctly. Your designation will appear on your experience letter later, so it matters.
• Work location, and whether the letter allows the company to transfer you to another city.
• Joining date and where to report.
• Reporting manager or department, if mentioned.
• The deadline to accept the offer.

The salary annexure

The annexure, or salary breakup, is the most important page. Check that it shows:

• Fixed pay: basic salary, house rent allowance (HRA), special allowance and any other monthly components.
• Variable pay: how much, what it depends on, and when it is paid. Ask what percentage was actually paid out last year.
• Employer contributions: employer PF, gratuity and insurance, which are part of your CTC but not your monthly pay.
• One-time components: joining bonus or relocation allowance. These often make the first-year CTC look bigger than your ongoing salary.

Ask HR for the expected monthly in-hand salary if it is not obvious. Our explainer on CTC versus in-hand salary shows how to work it out yourself.

Probation

Most companies have a probation period, commonly three to six months, during which either side can end the employment with a shorter notice period. Check how long it is, what the notice period is during probation, and how confirmation works. Some letters allow the company to extend probation, which is worth knowing in advance.

Notice period

After confirmation, notice periods in Indian companies typically range from 30 to 90 days. A long notice period affects how easily you can switch jobs later, because many employers prefer candidates who can join quickly. Check whether the policy allows a notice buyout and how it is calculated. Our guide to notice periods and buyouts explains how this usually works.

Service agreements and bonds

Some offers, especially for freshers who will receive long paid training, come with a service agreement: you agree to stay for a period or pay a stated amount if you leave early. Read the duration, the amount, whether it reduces over time, and what triggers it. Be wary of any requirement to hand over original certificates. Read what to check in a service agreement before you sign one.

Conditions attached to the offer

Offers are often conditional. Look for conditions such as:

• Clearing a background verification of your education and previous employment.
• Submitting documents by a certain date.
• For freshers, passing your final exams without backlogs and meeting a minimum percentage.
• Providing a relieving letter from your current employer.
• Passing a medical check.

Make sure you can meet every condition. If you are unsure, for example because your results are not out yet, ask HR how it will be handled.

Clauses that deserve a second read

• Joining bonus clawback. Many joining bonuses must be repaid, fully or partly, if you leave within a year or two.
• Non-compete clauses. Some letters say you cannot join a competitor for a period after leaving. Indian courts have generally been reluctant to enforce restrictions that stop you working after your employment ends, but clauses about confidentiality and not poaching clients or colleagues are treated differently. Read them and ask questions.
• Intellectual property. Check whether the company claims ownership of things you create outside work, such as side projects or apps.
• Dual employment and moonlighting. Many employers prohibit any other paid work, including freelancing, without written permission.
• Working hours and shifts. Night shifts, rotational shifts or weekend work should be stated clearly.

Red flags

Walk away, or at least verify very carefully, if you see any of these:

• A request to pay for training, a laptop, a security deposit or "processing".
• An offer sent from a free email address such as Gmail or Yahoo rather than the company's domain.
• No company address, registration details or named signatory.
• An offer without any interview, or a salary far above what the role normally pays.
• Pressure to accept within hours, or requests for bank OTPs or passwords.

Our guide on how to spot fake job offers covers these in more detail.

How to ask for clarification or changes

Email HR with specific, polite questions. You do not need to accept and then argue later. For example:

Dear Ms. Rao,

Thank you for the offer for the Associate Software Engineer role. I'm very pleased to receive it. Before I accept, could you please help me with two points? First, could you share the expected monthly in-hand salary based on the annexure? Second, the letter mentions a joining date of 1 December. My final exam results are expected on 10 December. Would it be possible to join on 15 December instead?

Thank you, and I look forward to hearing from you.

Regards,
Arjun Mehta

After you accept

• Accept in writing, by email or through the company's portal, and keep a PDF of the signed letter.
• If you are currently employed, do not resign until you have the signed offer, and ideally until the background check has started.
• Note the documents you need on joining day and start collecting them early.

This article is general information, not legal advice. For questions about a specific contract, speak to a lawyer.