Offer Letter Generator India 2026 (Free PDF)

Complete Guide

Everything You Need to Know About Offer Letters in India

An offer letter is the formal document that bridges the gap between a verbal or email-based job offer and the candidate's joining date. It sets out the headline terms of employment, gives the candidate something to sign, and protects both parties under Indian contract law.

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2026 legal update: the appointment letter is now mandatory Since the labour codes came into force on 21 November 2025, section 6(1)(f) of the Occupational Safety, Health and Working Conditions (OSH) Code, 2020 requires the employer to issue a letter of appointment to every employee in a covered establishment (broadly, ten or more workers), permanent or fixed term. The offer letter itself is not required by statute, but it should match the appointment letter you will issue on joining. Use our appointment letter generator for that document.

Offer Letter vs Appointment Letter: Key Differences

Offer Letter Pre-joining

Issued after the candidate is selected
Covers headline terms only (CTC, designation, joining date)
Short (1 to 2 pages)
Signed before the candidate resigns from their current job
Can be conditional on background verification
Becomes binding when the candidate countersigns

Appointment Letter Post-joining

Issued on or after the date of joining
Comprehensive employment contract (4 to 8 pages)
Covers leave policy, code of conduct, IP ownership, NDA
Specifies notice period and termination conditions
Includes PF, ESI, gratuity disclosures
Mandatory under the OSH Code since 21 Nov 2025

CTC Breakdown: How the Salary Split Works

The Code on Wages, 2019 does not say basic must be 50% of CTC. What section 2(y) does is cap the allowances left out of "wages" (HRA, conveyance, special allowance and similar) at 50% of total remuneration. Anything above that cap is added back to wages, which raises the base for PF, gratuity and bonus. A structure with basic plus DA at about half of pay keeps you clear of that add-back, which is why this tool uses 50%.

Component	Typical %	Notes
Basic Salary	50% of CTC	Set at 50% here so excluded allowances stay within the Code on Wages 50% cap. Base for PF and gratuity.
HRA (House Rent Allowance)	50% of Basic (metro) or 40% of Basic (non-metro)	Partially tax-exempt under old regime if employee lives in rented accommodation. Fully taxable under new regime.
Special Allowance	Residual (CTC minus other components)	Fully taxable. Used to bridge the gap between gross salary and CTC.
Employer PF Contribution	12% of Basic (statutory cap: Rs. 1,800/month)	Employer contributes 12% of Basic. Statutory wage ceiling for EPF is Rs. 15,000/month, making the cap Rs. 1,800/month.
Gratuity Provision	4.81% of Basic	Employer sets aside this amount. Under section 53 of the Code on Social Security, 2020, gratuity is payable after five years of continuous service, without that minimum on death or disablement, and to fixed-term employees on completion of their contract.
Total CTC	100%	Includes gross salary plus employer-side contributions (PF, gratuity, insurance if any).

Employee Deductions (what gets deducted from gross pay): Employee PF (12% of Basic, capped at Rs. 1,800/month), Professional Tax (varies by state; the Constitution caps it at Rs. 2,500/year), Income Tax (TDS calculated monthly based on declared investments), and ESI (0.75% of gross if gross is up to Rs. 21,000/month).

What to Include in an India Offer Letter (Checklist)

Mandatory Elements

Company name and address on letterhead
Date of issue and a unique reference number
Candidate's full legal name and address
Job title and department
Date of joining and work location
Annual CTC with full breakup
Probation period and notice period during probation
Acceptance deadline and signature block

Recommended Additions

Conditions of employment (background check, document submission)
Statement that appointment letter will be issued on joining
Brief note on applicable leave and working hours
PF and ESI disclosure
Confidentiality reminder (basic clause)
Reporting manager and team
Company code of conduct reference

Can an Employer Withdraw an Offer Letter?

Before the candidate accepts: yes, an offer can be revoked. After the candidate countersigns, withdrawing it without a valid reason is a breach of contract, and under section 73 of the Indian Contract Act, 1872 the candidate can claim compensation for losses that flow from it, for example after resigning from a previous job. How much a court awards depends on the facts. To protect yourself, include a "subject to successful background verification" clause if your process requires it, and finish checks early.

The values and formulas on this page are set for FY 2026-27. The tool does not calculate income tax. Labour code statements reflect the codes in force since 21 November 2025. If you notice an error or outdated information, please write to [email protected] and we will fix it.

How to write an offer letter

Confirm the selected candidate, role, department, location and reporting manager with the hiring manager.
Enter the company and candidate details and the proposed date of joining.
Enter the annual CTC and city type; check the CTC breakup the tool shows.
Choose the probation period and set an acceptance deadline, usually 3 to 7 days.
Generate the letter, review the conditions (background checks, documents), and download it as a PDF.
Send it for signature, and issue the appointment letter on or before the joining date.

Which letter do I need?

Offer letter (this page): sent when a candidate is selected. It proposes the role, CTC and joining date for the candidate to accept.
Appointment letter: the written terms of employment given on joining. The OSH Code requires one for every employee.
Joining letter: records the date the employee actually reported for duty. It points back to the offer or appointment letter.
Confirmation letter: ends probation and states the notice period and terms that apply from then on.

FAQ

Frequently Asked Questions

Is an offer letter legally binding in India?

Once both sides sign it, an offer letter is an agreement under the Indian Contract Act, 1872. If the employer withdraws it without a valid reason after acceptance, the candidate can claim compensation for the resulting loss under section 73 of the Act; if the candidate does not join, the employer's remedy is usually limited. Conditions such as background verification should be written into the offer.

What is the difference between an offer letter and an appointment letter?

An offer letter is a short, often conditional document sent before the candidate joins. It covers the role, CTC and joining date. An appointment letter is issued on or around the joining date and sets out the full terms: wages, probation, notice period, leave, confidentiality and IP. Since 21 November 2025 the appointment letter is the one the OSH Code requires, so issue both.

Is a written offer or appointment letter mandatory in India in 2026?

The appointment letter is. Section 6(1)(f) of the Occupational Safety, Health and Working Conditions Code, 2020, in force since 21 November 2025, requires the employer to issue a letter of appointment to every employee in a covered establishment, and to existing employees without one within three months of the Code's commencement. No law requires an offer letter, but sending one is standard practice.

What CTC components must be in an offer letter?

At minimum, state the annual CTC and the monthly gross. A full breakup shows basic, HRA, special allowance, employer PF and gratuity provision. Under section 2(y) of the Code on Wages, 2019, allowances excluded from wages are capped at 50% of total remuneration and any excess counts as wages for PF, gratuity and bonus. This tool sets basic at 50% of CTC to stay clear of that add-back.

What probation period is standard in India?

Three to six months is common, and six months is typical for many private employers. No central law fixes one period for every employee. Industrial establishments with 300 or more workers follow their certified or model standing orders under the Industrial Relations Code, 2020. Notice during probation is usually shorter, often two to four weeks.

Can an employer withdraw an offer letter after it is accepted?

It can, but at a cost. Withdrawing an accepted offer without a valid reason is a breach of contract, and the candidate can claim compensation under section 73 of the Indian Contract Act, 1872, especially if they resigned from another job relying on the offer. Write clear conditions, such as successful background verification, into the offer and finish checks before the candidate resigns.

How do I download the generated offer letter as a PDF?

Fill in the required fields, then click Generate Offer Letter. Once the preview appears, click Download PDF. Your browser's print dialog opens with the letter laid out for printing. Set the destination to Save as PDF and click Save. On Safari, use the PDF menu at the bottom left of the print dialog.

Offer Letter Generator India 2026