What is an offer letter?
Quick answer
An offer letter is the written document a company sends to the candidate it has chosen. It states the job title, pay, schedule, start date, who the person reports to, any conditions such as a reference or background check, and how to accept.
Last updated
Updated · By Robert Breen
Why it matters for a small business
The offer letter is where hiring promises become written. Candidates make big decisions based on it, like resigning from a current job, so a wrong number or a vague start date causes real harm and real disputes. It should match what was agreed, the approved pay range and the job description.
Wording matters too. A careless phrase can suggest guaranteed employment or a benefit you did not intend to offer, and rules on at-will language, pay and required notices vary by state. Use a template your HR team or an employment attorney has reviewed, and change only the details for each hire.
In a real lesson: Turn an Interview Debrief into a Scorecard and a Candidate Follow-Up (Recruiting & HR)
The Interview Debrief to Scorecard lesson ends before an offer, which is the point. At Willow Bend Physical Therapy, a made-up clinic, Hannah says there will be "no offer until we've checked references," and the panel records it as a decision. The candidate has also asked for about two dollars an hour over the posted range.
Hannah refuses to settle pay in the debrief and plans to ask Dr. Patel on Thursday. When ChatGPT drafts the follow-up email, the request says to leave out the scores, the discussion and the pay question. Keeping pay out of casual messages until it is decided is the same discipline an offer letter needs.
The Reply Faster: Customer Emails lesson adds the last habit: ask ChatGPT to match every promise in a draft to a fact you supplied. For an offer, that means checking pay, title, start date and conditions against what was approved. If the candidate counters, the offer negotiation reply prompt can help draft a response.
Try this lesson free or read the step-by-step guide.
Common confusions
Offer letter vs employment contract
An offer letter is usually shorter and confirms the main terms. An employment contract is a fuller agreement that may set a fixed term or detailed obligations. Which one you need is a question for an employment attorney.
Offer letter vs verbal offer
A verbal offer is often made first, by phone. The letter puts it in writing. If the two differ, expect confusion, so make sure the letter matches what was said.
Tips
- Start from an approved template and change only the details for this hire.
- Check every number and date against the approved pay range and the job description before sending.
- List any conditions, such as a reference check, plainly in the letter.
Related terms
More Business terms
Where you use it: free lessons
- Turn an Interview Debrief into a Scorecard and a Candidate Follow-Up (Recruiting & HR) (ChatGPT, 9 min)
- Reply Faster: Turn a Messy Customer Email Thread into a Clear, Friendly Reply (ChatGPT, 9 min)
Prompt templates that use it
Frequently asked questions
- What should an offer letter include?
- At minimum the title, pay, schedule, start date, manager, any conditions and a deadline to accept. Required notices vary by state, so have HR or an employment attorney confirm your template.
- Can AI write an offer letter?
- AI can fill in an approved template from your notes. A person should check every term against what was approved, and the template itself should be reviewed by HR or counsel.