A clear offer letter is the first document a new hire sees, and it sets the tone for the whole employment relationship. Get the clauses right and both sides know exactly where they stand on pay, probation and notice. Get them vague and you invite disputes. This guide explains the standard offer letter format used in Pakistan, walks through each key clause, shows how an offer letter differs from a full contract, and gives you a sample skeleton you can adapt. For a wider set of workplace documents, see our legal forms library.
What an offer letter is and when you need it
An offer letter is a formal, written proposal from an employer to a candidate to join on stated terms. You issue it once you have decided to hire someone but before they start work - typically after interviews and any reference or document checks. It records the essentials so both parties are agreed before day one.
Under the Contract Act 1872, a valid contract needs an offer, acceptance and consideration. The offer letter is the offer; the salary is the consideration; acceptance happens when the candidate signs and returns it, or when they report for duty - implied acceptance under Section 8. That means a signed, unconditional offer letter can itself be an enforceable employment contract. Many employers still follow it with a fuller appointment letter once the person joins.
Offer letter vs employment contract
The two documents overlap but are not identical. Knowing the difference helps you decide how much detail to put where.
| Offer letter | Employment contract / appointment letter |
|---|---|
| Proposes the role and headline terms | Sets out the full terms of service in detail |
| Often conditional (references, medical, documents) | Issued after acceptance, usually unconditional |
| Short - one to two pages on letterhead | Longer, with detailed policies and schedules |
| Binding once accepted or duty is reported | Binding on signature; governs the ongoing relationship |
Post-employment restrictions such as confidentiality, non-solicitation or a limited non-compete belong in a properly worded contract. Remember that Section 27 of the Contract Act 1872 restricts agreements in restraint of trade, so broad non-compete clauses are difficult to enforce - keep them reasonable and specific.
Key clauses to include
A well-drafted offer letter in Pakistan should cover the following. Provincial labour laws - such as the Shops and Establishments Acts of Punjab and Sindh and the Industrial and Commercial Employment (Standing Orders) Ordinance 1968 - shape several of these terms, so word them to fit your province and sector.
| Clause | What it covers |
|---|---|
| Position and reporting line | Job title, department, and who the employee reports to |
| Start date | The commencement date; reporting for duty signals acceptance |
| Salary and allowances | Gross or basic pay, house rent and utility allowances, payment frequency; must meet the applicable provincial minimum wage |
| Probation period | Length (usually three to six months) and the notice that applies during it |
| Working hours and place of work | Daily and weekly hours, location, remote or on-site |
| Leave and benefits | Annual, sick and casual leave, public holidays, medical, provident fund or EOBI as applicable |
| Notice period | Notice each side must give to end the relationship after probation |
| Confidentiality and IP | Protection of company information and ownership of work product |
| Conditions of the offer | Document verification, references, medical fitness, right to work |
| Governing law and jurisdiction | The applicable labour law and the courts that will hear disputes |
Sample offer letter format
Below is a generic skeleton to start from. It is not a finished legal document - replace every placeholder in brackets, delete what does not apply, and have a lawyer review it against your province's labour law before you issue it.
Stamp duty and registration
An offer letter is normally issued on company letterhead and does not require stamp paper or registration to be valid - acceptance is what makes it binding under the Contract Act 1872, not a stamp. Some employers prefer to record employment on a formal contract executed on judicial stamp paper. Where that is done, the stamp value is fixed by the relevant provincial Stamp Act 1899 and differs from province to province, so confirm the current amount for your province rather than relying on a fixed figure. If you are unsure whether a letter or a stamped contract suits your situation, take advice - our contractual documentation service can prepare the right instrument.
Common mistakes to avoid
Vague salary wording, no probation clause, missing notice terms, and copy-pasting a foreign template that ignores Pakistani labour law are the usual pitfalls. Another is treating a conditional offer as final - if the offer depends on document checks, say so clearly, or the candidate may hold you to it. Finally, do not bury restrictive covenants in an offer letter; they belong in a considered contract that respects Section 27. When in doubt, a short review by a lawyer is far cheaper than a dispute.
Frequently asked questions
Is an offer letter legally binding in Pakistan?
Yes, once accepted - by signing and returning it or by reporting for duty under Section 8 of the Contract Act 1872. Until then it is only an offer, and a conditional offer stays subject to its stated conditions.
How is an offer letter different from an appointment letter?
The offer letter proposes the role and headline terms and is often conditional. The appointment letter follows acceptance and sets out the full terms of service. A signed, unconditional offer letter can itself form the contract.
Does an offer letter need stamp duty?
No. Issued on letterhead it needs no stamp paper or registration. A formal contract on stamp paper is optional, and its stamp value under the provincial Stamp Act 1899 varies by province - confirm locally.
How long should probation be?
Usually three to six months in the private sector. State the length and the notice that applies during and after probation in the letter itself.
Can I add a non-compete clause?
Section 27 of the Contract Act 1872 limits restraint of trade, so broad non-competes are hard to enforce. Reasonable confidentiality and non-solicitation terms are usually acceptable - have them drafted carefully.