You get the offer letter, jump straight to the CTC number on page one, and start doing the maths against your current salary. Almost nobody reads past that number - and almost every guide to reading an Indian offer letter is written for the company sending it, not for you. This one flips that. Since 21 November 2025, four new Labour Codes have quietly changed what your offer letter is legally required to say, and most candidates have no idea.
This is a checklist for the seven lines worth checking before you sign - not the salary itself, but the terms around it that decide what that salary actually means. We built it from the Ministry of Labour's own guidance and a practising law firm's reading of the new Codes, not from HR marketing content.
What changed in every Indian offer letter on 21 November 2025
India's four Labour Codes - covering wages, industrial relations, social security and workplace safety - came into force on 21 November 2025, replacing a patchwork of older laws. For someone reading an offer letter, two changes matter most.
First, a written appointment letter is now mandatory for every worker. That includes permanent employees, but also fixed-term, contract and gig workers - categories that were often hired on a verbal understanding or a bare email before. If a company still tries to onboard you without a formal letter, that is now a compliance gap on their side, not a normal shortcut.
Second, every hire must be classified. The letter has to say whether you are being hired as permanent, fixed-term, contract or gig staff. This is not paperwork trivia - your classification is what decides your gratuity eligibility and which protections apply to you, which is exactly why it is line 1 on this checklist.
Line 1: Does the letter state your worker class?
Read the first page of your offer letter looking for one specific word: your employment classification. Are you permanent, fixed-term, contract or gig? Companies do not always spell this out clearly, especially for roles that sit between categories, like a one-year "contract to hire" or a project-based engagement at a GCC.
This matters because your classification is the gate for several benefits further down this checklist - gratuity timelines, notice-period rules and which parts of the Codes cover you at all. If your letter does not say it plainly, ask HR directly: "Am I being hired as a permanent employee, or on a fixed-term contract?" Get the answer in writing.
A fixed-term role is not automatically a worse offer - many product companies and GCCs use fixed-term contracts for perfectly stable, well-paid roles. But you should know which one you are signing, because it changes the maths on gratuity, as Line 4 below explains.
Line 2: Does Basic plus DA make up at least 50% of your CTC?
This is the change most candidates miss entirely, and it can explain a lower in-hand number without the offer actually being worse. Under the Code on Wages, your Basic pay plus Dearness Allowance (DA) must add up to at least 50% of your total CTC. If your salary structure pushes Basic and DA below that - by loading up on HRA, special allowances and other components - the excess gets pulled back into the wage base for calculating PF, ESI and gratuity.
In plain terms: a salary structure that used to keep Basic low and allowances high, to boost your monthly in-hand number, is no longer fully allowed. More of your CTC now has to count as "wages" for statutory purposes.
Ask HR for a full salary breakup, not just the CTC total, and check that Basic plus DA clears the 50% line. If it does not, ask why - it may be a compliance gap worth flagging before you sign.
Line 3: What's your notice period, and does it change during probation?
Almost every Indian offer letter states a notice period, but many state only one number for your entire tenure, when the real terms usually differ before and after you are confirmed. Look for two separate numbers.
- During probation: commonly 7 to 14 days. Probation itself typically runs 3 to 6 months, and your letter should state its length separately from the notice period.
- After confirmation: commonly 30 to 90 days, depending on seniority and company type. There is a 30-day statutory minimum for employees classed as "workmen" under the Codes.
If your letter states a single notice period with no mention of probation, that is worth clarifying before you join - not after you have already resigned from your current role and discovered your new employer expects 90 days from day one. If you are already mid-negotiation on shortening a long notice period at your current job, our guide on switching jobs with a 90-day notice period covers the early-release conversation and the buyout maths.
Line 4: When do you become eligible for gratuity?
Gratuity eligibility depends heavily on your classification from Line 1, and the rule changed for one category of workers in November 2025.
Regular, permanent employees: the eligibility rule is unchanged - 5 years of continuous service, with 4 years and 240 days counting as a full 5 under existing case law. Any period of 6 months or more in your final year of service rounds up to a full year for the payout calculation.
Fixed-term employees: under the new Code on Social Security, you become eligible for gratuity after just 1 year of continuous service, not 5. This is a large change if your offer is for a fixed-term or GCC contract role, and it is worth confirming explicitly with HR that this shorter timeline is reflected in your letter.
If you are weighing a fixed-term or contract offer against a permanent one at similar pay, this 1-year gratuity eligibility is a real point in the fixed-term offer's favour that most people do not know to check.
Line 5: Are PF, ESI and gratuity actually named in the letter?
Under the new Codes, your entitlements to PF, ESI and gratuity must be disclosed in the appointment letter, not left implied or assumed because "every company does PF." In practice, many offer letters still just show a PF line item in the CTC breakup table without naming the entitlement itself in the letter's terms.
This line is quick to check and easy to fix if missing: scan the letter for explicit mentions of Provident Fund, Employee State Insurance (if your salary band qualifies) and gratuity eligibility. If any is missing, ask HR to confirm it in writing - an email reply from HR referencing the letter is enough to create a paper trail, even if they do not reissue the letter itself.
Reading an offer and not sure what's normal for your role or company type?
Twenty minutes with someone who has actually joined at a similar company beats guessing from a PDF. Talk to a working professional who knows the real terms at your target employer, on Amigzo, and pay per minute.
Lines 6 and 7: ESOP terms, and how much of your CTC is actually guaranteed
Line 6, if there is an ESOP: check the strike price, the vesting schedule (commonly a 1-year cliff followed by monthly or quarterly vesting over 4 years), and how long you have to exercise your vested options after you leave the company. One number worth knowing before you get excited about the ESOP line in your offer: fewer than 2% of DPIIT-recognised startups in India currently hold the certification needed for employees to defer their exercise tax. For almost everyone, tax on ESOPs is due in cash at exercise, on shares you may not yet be able to sell. Our ESOP vs cash guide walks through this maths in full, and if the whole offer is startup equity-heavy, how to evaluate a startup offer is the wider framework.
Line 7: separate your CTC into what is guaranteed - Basic, DA, fixed allowances - and what depends on something else happening, like an annual bonus tied to company performance, a variable-pay component tied to your rating, or ESOP value that only exists if the company has a future liquidity event. A CTC number that is 25% variable pay is a meaningfully different offer from one that is 5% variable, even at the identical headline figure. If you are choosing between two offers and this split is part of what is making the decision hard, our framework for choosing between job offers covers the rest of that comparison.
The 7-line checklist, at a glance
Use this as your final pass before you sign anything.
| # | Check | Why it matters |
|---|---|---|
| 1 | Worker class stated (permanent, fixed-term, contract, gig) | Drives your gratuity timeline and which protections apply |
| 2 | Basic + DA is at least 50% of CTC | Sets your real PF and gratuity base, not just your in-hand number |
| 3 | Notice period during probation vs after confirmation | Avoids a surprise 90-day notice you did not know applied from day one |
| 4 | Gratuity eligibility timeline (5 years, or 1 year if fixed-term) | A large, easy-to-miss difference by classification |
| 5 | PF, ESI and gratuity named explicitly in the letter | Turns an assumption into a written entitlement |
| 6 | ESOP strike price, vesting and exercise window (if offered) | Tax is usually due in cash at exercise, not deferred |
| 7 | Guaranteed pay vs variable, bonus and equity | Two offers with the same CTC can carry very different risk |
What to do if something's missing
Do not treat a missing or unclear term as something you have to accept quietly, and do not treat it as a reason to walk away without asking first. Most gaps are fixable with one short email.
"Thank you for the offer - I'm excited about the role. Before I sign, could you confirm a couple of details in writing: my employment classification, and whether the notice period during probation differs from the notice period after confirmation? I want to make sure I understand the terms correctly."
This is a normal, low-friction ask. A reasonable employer will simply answer it, and their reply by email becomes part of your record even if the formal letter is never reissued. If you get resistance to a straightforward clarification request before you have even joined, treat that itself as a data point about how the company handles paperwork and process.
Key takeaways
- Check the classification first. Whether you are permanent, fixed-term, contract or gig decides your gratuity timeline and which of the new Codes' protections apply to you.
- A lower in-hand number is not always a worse offer. If Basic plus DA clears the new 50% floor, more of your CTC is going into PF and gratuity, not disappearing.
- Separate the probation notice period from the confirmed one. They are usually different, and your letter should say so explicitly.
- Fixed-term gratuity kicks in after 1 year, not 5. Worth knowing if you are comparing a fixed-term offer to a permanent one.
- Get gaps confirmed in writing before you sign, not after you have already joined.
Frequently asked questions
Quick answers on reading a job offer in India after the Labour Codes.
Is a written appointment letter legally mandatory in India now?
Yes. Since the four Labour Codes came into force on 21 November 2025, employers must issue a written appointment letter to every worker, including fixed-term, contract and gig workers, not just permanent employees. If you have only a verbal offer or an email with no formal letter, you can ask HR for one before joining.
Why is my in-hand salary lower if Basic plus DA is 50% of my CTC?
Because a bigger share of your CTC now counts as wages for PF, ESI and gratuity, and those are calculated on Basic plus DA, not on your full CTC. A lower monthly in-hand number usually means a larger PF contribution and a larger gratuity payout later, not that the offer got worse. Compare the total value, not just the number that lands in your account.
Do I get gratuity if I am hired on a one-year fixed-term contract?
Yes, under the new rule fixed-term employees become eligible for gratuity after just 1 year of continuous service, down from the 5-year rule that still applies to regular permanent employees. If your offer is for a fixed-term or contract role, check that this is reflected correctly in the letter.
What is a normal notice period during probation in India?
Most Indian offers set a shorter notice period during probation, commonly 7 to 14 days, rising to 30 to 90 days once you are confirmed. There is a 30-day statutory minimum for employees classed as workmen. If your letter states only one notice period for the whole tenure, ask HR whether the probation period is shorter.
What should I do if a term is missing from my offer letter?
Ask HR to confirm it in writing before you sign, ideally as an email reply or an addendum to the letter itself. A verbal assurance is not enforceable if a dispute comes up later. Worker classification, notice period, probation length, and PF, ESI and gratuity entitlements should all be named terms, not assumptions.
Should I negotiate my offer before or after checking these terms?
Check these terms first. A missing classification or an unclear notice period changes what you are actually agreeing to, and it is far easier to ask HR to fix or clarify a letter before you sign than after you have joined. Once the compliance basics are confirmed, move on to negotiating the number itself.