Offer letter vs appointment letter: what each one does in India
When each letter is issued, what goes in it, when an appointment letter is a legal requirement, and what the labour-code format asks for.
Summary
- The offer letter makes the offer and records acceptance. The appointment letter sets the full terms, and it is the one you rely on in a dispute.
- Since 21 November 2025, the OSH Code has required an appointment letter for every employee in an establishment with 10 or more workers.
- The central rules list what it must state, from type of employment to PF, ESI and maternity benefits. Most states are still finalising their formats.
Many startups send one document and call it an offer letter. It covers salary and a joining date, and nothing else.
That works until something goes wrong: a dispute over notice pay, a question about who owns the code, or an investor asking to see employment terms. The fix is two documents, each doing a different job.
The short version
What each document does. Page counts are common practice, not law.
| Offer letter | Appointment letter | |
|---|---|---|
| Purpose | Makes the job offer and records acceptance | Sets out the full terms of employment |
| When | Before joining | On appointment, on or before the joining date |
| Contents | Role, pay, joining date and conditions | Full terms, plus the particulars the labour-code format asks for |
| Length | One or two pages | Usually four to ten pages, plus annexures |
| Legal effect | Can bind once accepted, but covers only the basics | The main employment contract; required at 10 or more workers |
| Signed by | The company, then the candidate to accept | The company and the employee |
What goes in an offer letter
Keep it short and clear:
- Job title, and the team or manager the person reports to
- Total compensation (CTC), with variable pay or a joining bonus shown separately
- Any stock options, stated as subject to the plan and grant letter (our ESOP guide covers those)
- Joining date and work location, or remote
- Conditions: background verification, documents to submit, and the date the offer lapses
- A line saying a detailed appointment letter will follow on joining
Is an appointment letter mandatory?
For most growing startups, yes. Section 6(1)(f) of the OSH Code, in force since 21 November 2025, requires every employer to issue a letter of appointment to every employee on appointment.
The duty attaches to an establishment, which the Code defines as a place where 10 or more workers are employed. Workers include technical and clerical staff, but not people in mainly managerial or administrative roles or better-paid supervisors. Once you cross that line, every employee gets a letter.
Staff who joined before the Code started had to receive one within three months, by 21 February 2026. Any gap now is a live default, not a tidy-up. The Code's general penalty is ₹2 lakh to ₹3 lakh, so confirm your exposure with your adviser.
Below 10 workers it may not be strictly required, but it is still the document you will rely on in any dispute, and the first one investors ask for.
What the labour-code format asks for
The Code leaves the content and form to the rules. The central OSH rules notified on 8 May 2026 set a format that includes the following; check the form your state prescribes:
- Type of employment: regular, fixed-term or contractual
- Skill category
- Wages and allowances
- Whether PF and ESI apply
- Maternity benefits, for women employees
Those central rules govern central-sphere establishments. Most private startups fall under their state government, whose own rules set the format, and most states are still finalising theirs. Until yours is final, covering every item on the central list is the cautious course. Check your state's rules before you settle a template.
What else a good appointment letter carries
The statutory particulars are a floor. A letter that protects both sides also covers:
- Role: designation, reporting line and place of work
- Pay: salary break-up, payment dates and how revisions work
- Probation: its length, and how confirmation or extension works
- Hours and leave, usually by reference to your policies
- Notice on both sides, during and after probation
- Confidentiality and IP: confidentiality during and after employment, and assignment of work created in the job
- Non-solicitation of employees and clients
- Conduct: your code of conduct, POSH and IT policies
- Exit: grounds for termination, handover, return of assets and full and final settlement
- Governing law and dispute resolution
Two of these need care. Courts have upheld some employee non-solicits but treated broad client non-solicits as disguised non-competes, so word them narrowly. On exit, the Code on Wages wants wages paid within two working days, so plan the settlement before the last day. Clause wording for IP and confidentiality is in our guide to commercial contract clauses.
Common mistakes
- An offer letter and nothing else. Notice, IP and confidentiality are left undefined.
- No letter for long-serving staff. People who joined before 21 November 2025 are covered too.
- Copied templates, with clauses from another company, country or industry.
- Post-employment non-competes. Section 27 of the Indian Contract Act 1872 makes them void. Restrictions during employment are generally fine, so put the effort into confidentiality, IP and non-solicitation.
- Numbers that do not match across the offer letter, appointment letter and payroll.
- Unsigned copies. A letter the employee never signed is much weaker if it is ever tested.
A quick test: every employee has a signed offer letter and a signed appointment letter, the pay matches payroll, and the signed copies sit in the employee's file.
Questions
Are an offer letter and an appointment letter the same?
No. The offer letter makes the offer before joining. The appointment letter sets out the full terms and is the main employment contract.
Is an appointment letter mandatory in India?
Yes, for every employee in an establishment with 10 or more workers, under section 6(1)(f) of the OSH Code. Below that it may not be required, but it is still good practice.
What must an appointment letter contain under the new labour codes?
The central OSH rules ask for, among other details, the type of employment, skill category, date of joining, wages and allowances, whether PF and ESI apply, and maternity benefits for women. Your state's rules set the format that applies to you.
Is an offer letter a binding contract?
Once accepted, it can be, on the terms it states. Under the Indian Contract Act 1872, an accepted offer becomes a contract when the usual conditions are met, such as free consent and lawful consideration. It covers only the basics, though, so it cannot stand in for an appointment letter. Take advice before withdrawing an accepted offer.
If you want letters written for your stage, or yours checked against the new format, our HR business partnering work covers both. The step before is settling each person's status: see consultant, employee or intern. For timing, see when should a startup hire HR.
Current as at October 2026. Labour rules and thresholds change, and state rules differ. This is general information, not legal advice: confirm your position with your adviser.
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