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Free letter template · Word

Offer Letter Format for Software Development Company

This offer letter is designed for product studios and software development companies hiring developers, QA and designers who write and ship code. It goes beyond salary to cover who owns the code, how open-source and side projects are handled, laptop and repository access, and any ESOP grant.

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Preview of the letter

[Highlighted] = fill in
[Company Logo][Company Name]

LETTER OF OFFER

Ref. No.:
[Reference Number]
Date:
[Date]

To,
[Candidate Name]
[Candidate Address]

Subject: Offer for the Role of [Designation] – [Team Name]

Dear [Candidate Name],

It was great speaking with you. We are happy to offer you the role of [Designation] in the [Team Name] team at [Company Name]. You will primarily work on [Product / Client Project] using [Tech Stack], reporting to [Reporting Manager]. Your work arrangement will be [Onsite / Hybrid / Remote] with base location [Work Location], and your proposed date of joining is [Date of Joining].

1. Compensation and Benefits

  • Annual CTC: ₹[CTC], including fixed pay, employer PF contribution and gratuity.
  • Performance bonus: up to ₹[Amount] per year, based on the bonus plan.
  • ESOP: a proposed grant of [Number] options, subject to the company's ESOP plan, board approval and the vesting schedule in your grant letter.
  • Equipment: a company laptop with licensed tools / a monthly device allowance of ₹[Amount].
  • Health insurance for you and dependants as per policy.

2. Code, IP and Confidentiality

  1. All source code, documentation, designs, algorithms and inventions you create in the course of your employment, or using company resources, will be the exclusive property of the company, and you agree to sign any document needed to record this.
  2. You will list in Schedule A any personal projects or prior inventions you wish to exclude. New side projects or paid freelance work require prior written approval and must not compete with the company or use its code or time.
  3. Contributions to open-source projects using company code require approval from your manager, and the company's open-source licence rules must be followed.
  4. You shall keep client code, credentials, product roadmaps and customer data confidential, use only company-approved repositories and tools, and never copy code to personal accounts or devices.

3. Other Terms

This offer is subject to satisfactory background verification and submission of your relieving documents. Probation will be [Probation Period] months, and the notice period after confirmation will be [Notice Period]. Detailed terms will be set out in your appointment letter and IP agreement.

Schedule A – Prior Projects: [List project name and repository link, or write 'None']

Please confirm your acceptance by signing below before [Date].

Welcome to the team,

For [Company Name]
[Authorised Signatory]
[Designation]
Accepted by
[Candidate Name]
Date: [Date]

What this template includes

  • Role, primary tech stack and team, which helps developers judge fit
  • CTC with fixed pay and any ESOP grant stated as subject to the ESOP plan
  • Code ownership and assignment of inventions made during employment
  • Open-source and side-project disclosure rule to avoid IP conflicts
  • Device, repository and access-control obligations from day one
  • Background check and notice-period buyout terms where relevant

When to use it

  • Hiring a full stack, backend, mobile or QA engineer for a product or custom-development shop
  • Offering a role where the candidate will push code to client repositories
  • Making an offer that includes stock options or a retention bonus
  • Hiring developers who maintain personal open-source projects and need clarity on what is allowed

How to customise this template

  1. 1Fill in the stack (for example React, Node, Kotlin) and the product or client the person will work on
  2. 2Delete the ESOP line if you do not grant options, or insert the number and vesting summary
  3. 3Edit the side-project clause to match your actual policy on moonlighting
  4. 4Specify whether a company laptop is issued or a BYOD allowance is paid
  5. 5Add your notice-period buyout reimbursement terms if you offer them

HR tips

  • Ask candidates to list existing personal projects in a schedule so ownership is clear later
  • Do not promise ESOP numbers without board or plan approval; reference the plan document
  • Mention the hybrid or remote arrangement explicitly to avoid surprises
  • Keep the code-ownership clause consistent with the IP agreement signed on joining

This is a starting template. Review IP, ESOP and restrictive clauses against applicable labour and contract law, your company policies and with a legal adviser where needed.

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Frequently asked questions

Who owns the code written by a developer during employment?+

Generally the employer, when the offer and IP agreement say that work created in the course of employment is assigned to the company. Clear written assignment avoids disputes, especially for code written using company tools.

Can a developer contribute to open source while employed?+

Many companies allow it with prior disclosure, as long as no company code, confidential information or work time is used. State the rule in the offer and your policy.

Should ESOPs be mentioned in the offer letter?+

You can mention that an ESOP grant is proposed, but the actual grant, vesting and exercise terms must come from the approved ESOP plan and grant letter.

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