HomeProductsHRM/Payroll8 Important Components Of An Offer Letter

8 Important Components Of An Offer Letter

After struggling to apply for a job and go through a long series of recruitment processes, you finally receive an offer letter. This letter becomes the most prospective employee when applying for a job. The recruitment process is something that employees and companies have to go through. Companies also often have difficulty in the process, so now many companies have chosen to use recruitment software to facilitate it, for example for CV screening and monitoring the recruitment process automatically. 

When you receive an offering letter, there are a few things you should do. One of them is to review the offer you received through the letter. But in reality, even if you receive the letter, you are not yet officially an employee at the company. Why is that?

offer letter

Definition of Offer Letter

The offer letter is an official notification stating that a company select you to join them as a new employee. This letter also explains the rights and obligations of the employee after the approval stage of all the requirements during the initial recruitment phase. An this letter also helps explaining what the company expects from its employees.

This letter will help potential employees understand their rights and obligations while working. Company can offer the the job verbally. However, to avoid misunderstandings that might occur in the future, it is necessary to have official evidence to understand and agree on their respective roles.

Contents of the Offer Letter

Offering letters usually contain information about positions and jobs previously discussed during the interview, via telephone calls, or in person. Each company may have its terms and conditions. However, the most basic components of that usually consist of:

  • Job position.
  • Job description, including related details about the role, working conditions, departmental structure, or other terms of employment.
  • Salary, including details of the gross wage before tax, take-home pay (net salary), and other benefits such as year-end bonuses.
  • Facilities, benefits, incentives, and compensation that you will get. For example, mandatory health insurance, loans, reimbursements, overtime pay, and other benefits.
  • Allowance for paid and unpaid leave, annual leave, sick leave, menstrual leave, maternity leave, and other particular leave policies.
  • The effective date of starting work has been agreed upon by the recruiter and potential employee.
  • The deadline date for prospective employees to return the signed offer letter is at the latest.

At the end of the offering letter, there are usually two columns for signature proof of engagement. One column is for the company, usually signed by the HRD representative or company leader, while the other is for the new employees.

Related article: 8 Tips to Write a Successful Motivation Letter (with Examples)

Difference between Offer Letter and Employment Contract

Although there are still people who are wrong, an the letter is different from a work agreement contract. An offer letter is a letter that states the company’s interest in a candidate to fill a vacancy. In short, the offering letter is the beginning of a valid employment contract between the company and the employee. Moreover, offering letters are not legally binding.

In contrast to a work contract, it is more legally binding between the company and the employee. The employment contract contains all the terms of work in more detail, including the rights and obligations of both parties. In addition, the employment contract also provides certainty to the employees about their employment status, whether a full-time, part-time, or any others. Not only that, but the employment contract also contains information regarding the terms of termination of employment, while the offering letter does not have it. 

By signing an offering letter, a potential employee has not officially become an employee in a company. A person will officially have the status of an employee after signing a work contract on the condition that legality is in the form of stamp duty. Company usually send the employment contract after the employee and the company sign the offer letter. Manage all of the company documents with a cloud-based document management system from HashMicro. 

Benefits of Offering Letter

An offering letter can symbolize an agreement between the employer and the prospective employee. The presence of this offer letter is beneficial in explaining what the company wants its employees to do. A offering letter that already contains the signature of the prospective employee also means that the employee agrees and accepts the offer that the company provides in it. Therefore, an offer letter is a valid agreement between the employee and the company before signing the work contract.

Example of Offer Letter

Example of Offer Letter


offer letter

An offer letter is an official notification stating that a company select you to join them as a new employee. This letter can symbolize an agreement between the company, the employer, and the prospective employee. Therefore, it would be terrific if you received an offer lettering to send a reply as soon as possible to show your seriousness and professionalism to the company.

HashMicro, as the best ERP Software provider company in Singapore, is here to help your company’s operational efficiency. Our EVA Recruitment Managament makes it easy for you to manage job portals, resumes, candidate tracking, screening processes, communications, and test schedules, in one automated and integrated platform.

Interest in getting savvy tips for improving your business efficiency?

Anak Agung Istri Karlita Aprilianti
Anak Agung Istri Karlita Aprilianti
Junior Creative Content Writer at Hashmicro.


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