What Is Offer Letter?

An offer letter is a written document sent by an employer to a prospective employee that formally extends a job offer and summarizes the proposed terms of employment. It typically includes the job title, department, start date, compensation (base salary or hourly rate), pay frequency, any signing bonus, benefits summary, work location, whether the position is full-time or part-time, and any conditions that must be satisfied before the offer is finalized — such as passing a background check, drug screen, or reference check.

Offer letters occupy a careful legal middle ground. They are intended to be welcoming and clear without creating a formal employment contract that limits the employer's ability to terminate the employment at will. This is why most offer letters include an explicit at-will employment statement clarifying that either party can end the employment relationship at any time for any lawful reason. If an offer letter omits this language or uses language suggesting a fixed term or cause-based termination standard, it can create implied contract claims that complicate future termination decisions.

Offer letters differ from employment contracts in scope and intent. Employment contracts contain detailed terms, obligations, and protections for both parties and are more common for senior executives, highly specialized roles, or in countries where formal employment contracts are legally required. Offer letters are more concise and are typically used for standard-term employees in the U.S. market. Some employers follow up an accepted offer letter with a separate confidentiality agreement or intellectual property assignment agreement at onboarding.