Fixed-Term Appointment Letter Format and Sample

A fixed-term appointment letter hires a person for a set period, such as a two-year project, a seasonal peak or a funded programme, with employment ending on a stated date. The Industrial Relations Code allows fixed-term employment, and a fixed-term worker holds full employee status. This format states the term and its purpose, applies the same working conditions as permanent staff and records how gratuity, notice and renewal work.

When to use it: Hand it over on the joining day for any role tied to a project, client contract, season or grant with a known end date. HR prepares it after the department head confirms the term and its purpose, and an authorised signatory signs. The employee signs the duplicate. Any extension needs a fresh written letter before the end date.

Fixed-term appointment letter template

Copy the text below and replace everything in square brackets with your company details.

[Company Name]
[Registered Office Address]
[City], [State] [PIN Code]

Date: [Date]
Ref: [Company Code]/HR/FTE/[Year]/[Number]

To
[Employee Name]
Employee ID: [Employee ID]
[Residential Address]

Subject: Appointment on a fixed-term basis

Dear [Employee Name],

[Company Name] offers you employment as [Designation] in its [Department] department for a fixed term from [Start Date] to [End Date], for [Purpose, for example: the ABC hospital billing project or the festive season operations at the Pune warehouse]. Your employment will end on [End Date] without any further notice, unless a written extension is issued before that date.

Terms of your fixed-term employment

Place of work: [Office or Site Address]. Reporting to: [Reporting Manager Name], [Manager Designation].
Remuneration: ₹[Amount] gross per month as set out in Annexure A, credited to your bank account no later than the 7th of the next month.
Working hours: [Start Time] to [End Time], [Number] days a week, weekly off on [Day]. Any overtime needs your consent and is paid at double your ordinary rate of wages.
Leave: [Number] days of casual leave and [Number] days of sick leave, credited pro rata for the term, and annual leave with wages as per applicable law.
Statutory benefits: PF and ESI as applicable, and gratuity in proportion to the service you complete, as provided by law for fixed-term employees.
Probation: [Number] months, or write: There is no probation for this appointment.

Your hours of work, wages, allowances and other benefits will be the same as those of a permanent employee doing the same or similar work at this location. Either you or the company may bring this employment to an end before [End Date] with [Number] days' written notice, or wages for that period in place of notice. The ending of employment on [End Date] is by efflux of time and is not a termination for any fault.

This appointment does not create any right or expectation of permanent employment. If the company wishes to continue your services, it will issue a written extension or a fresh appointment letter before [End Date]. On the last day of the term, please hand back all company property and finish the exit process; your wages and other dues will then be paid as the law requires.

You will keep all company, client and employee information confidential during and after your employment, and follow the code of conduct and other company policies that apply to employees at your location.

Kindly sign and return the office copy to confirm that you accept these terms.

Yours sincerely,
For [Company Name]

[Signatory Name]
[Signatory Designation]

Enclosure: Annexure A, monthly pay details

Acceptance by employee

I accept this fixed-term appointment from [Start Date] to [End Date] on the terms stated above.

Name: [Employee Name]
Signature: ____________
Date: ____________

What to include

Start date, end date and purpose

Write both dates and the reason the role is time-bound. A stated purpose, such as a named project or season, shows the term is genuine and not a way to keep a permanent job on rolling contracts. Fixed-term employment is allowed under the Industrial Relations Code.

Parity with permanent staff

A fixed-term worker holds full employee status. State that hours, wages, allowances and benefits match those of permanent staff doing similar work, and make sure the payroll set-up actually follows that.

Gratuity without the five-year wait

Fixed-term employees get gratuity pro rata without the five-year minimum that applies to others. Mention it in the letter and provide for it in the project budget. The gratuity calculator helps estimate the amount.

Early exit and automatic end

Give a notice period for ending the contract early, and say that employment ends on the end date without a separate termination. This keeps the final day clear for attendance, payroll and the full and final settlement.

Renewal only in writing

If work continues after the end date without a letter, the terms become unclear. Require a written extension issued before the end date, and review whether the role has in fact become permanent.

Common mistakes to avoid

Paying fixed-term staff a lower wage or fewer benefits than permanent staff doing the same work.
Leaving out gratuity because the person will not complete five years.
Letting the person keep working after the end date with no extension letter.
Renewing the same contract again and again for a role that is clearly permanent.
Writing an end date but no notice term for ending the contract early.

Run it in ZeniaHR

Set up a Fixed term employment type in the organization masters and pick it on the employee's organization assignment. The Work terms policy holds probation months by employment type and the notice days, so the fixed-term group can follow its own rules. When the term ends, record the exit through offboarding with the matching exit reason and complete the exit checklist; Direct Payroll then limits the final month's paid days to the exit date. Keep the signed letter and any extension in the employee's documents.

Onboarding Employee records and exits Employee documents

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Frequently asked questions

Is fixed-term employment legal in India?

Yes. Fixed-term employment is allowed under the Industrial Relations Code, which came into force on 21 November 2025. A fixed-term worker holds full employee status, so working hours, wages, allowances and benefits should match those of a permanent employee doing similar work. The contract simply ends on the agreed date.

Do fixed-term employees get gratuity?

Yes. Fixed-term employees get gratuity pro rata for the period they work, without the five-year minimum that applies to other employees. The formula is 15 days' wages for every completed year of service, on the last drawn wages, applied in proportion to the period actually served. Budget for it from the start of the contract.

What happens when a fixed-term contract ends?

Employment ends on the stated date without a separate termination letter, because the term has run out. HR completes the exit process, collects company property, issues a relieving letter and settles dues. Wages due must reach the employee within two working days of the exit, and the other dues follow as per law and policy.

Can a fixed-term contract be extended?

Yes, by a written extension letter issued before the end date, stating the new end date and any change in pay or role. If the same work keeps getting extended year after year, review whether the role is really permanent and consider converting it with a regular appointment letter.