How to Write an Employment Contract

An employment contract is the written terms of a job: what the person will do, what they will be paid, and the rules both sides agree to follow. In some countries a full contract is optional; in many, employers must still give staff the key terms in writing. Either way, a signed contract is the cleanest way to avoid disputes about salary, hours, or notice.

Our free employment contract template covers the usual clauses. This guide is the order to fill them in — and when you should use a different document instead.

1. Identify the employer, the employee, and the role

Use the company's legal name, the employee's full name, the job title, a short list of duties, and who they report to. A start date and place of work (office, remote, or hybrid) belong here too. If the job is for a fixed term rather than ongoing, say when it ends.

2. Write the pay, hours, and benefits in numbers

State the salary (or hourly wage), how often it is paid, normal working hours, and the main benefits: paid leave, sick leave, and any pension or health coverage you actually offer. Do not promise benefits in the contract that the company does not have. Vague "competitive package" language is useless if you later disagree.

3. Add probation and notice

A probation period (often 1–6 months, depending on local law) lets either side end the relationship with shorter notice while you both decide if the fit is right. After probation, write the notice each side must give. Local employment law often sets a minimum notice you cannot contract below — check that before you pick a number.

4. Cover confidentiality, IP, and (carefully) restrictions

Employees usually agree to keep company information confidential and that work they create in the job belongs to the employer. Non-solicit and non-compete clauses are more sensitive: many places limit how long and how wide they can be, and some ban non-competes for ordinary employees altogether. If you include one, keep it narrow and get local advice. A separate NDA is sometimes used alongside the contract for extra clarity on secrets.

5. Sign it before day one

Send the contract with the offer, not on the first morning. The candidate countersigns to accept. Electronic signatures are valid for employment contracts in most jurisdictions, with a few local exceptions — see are electronic signatures legally binding?

Employee vs contractor — pick the right template

If the person will not be on payroll, will control how they work, and will invoice you as their own business, do not use an employment contract. Use an independent contractor agreement instead. Using the wrong document is one of the more common (and costly) hiring mistakes.

Disclaimer: This article is for general informational purposes only and is not legal advice. Employment law varies widely by country and can require specific written terms; consult a qualified lawyer before hiring.