Understanding Your Employment Contract

Your employment contract or offer letter sets out your pay, role, benefits, and often important restrictions—like non-compete, confidentiality, and IP assignment. If you don't read carefully, you might miss details that affect your pay, your freedom to leave, or what you can do after you leave. Here's a guide to the key sections to read so you know what you're agreeing to before you sign.

Pay and benefits

• Base salary. What's the amount? Is it annual or monthly? When do you get paid (e.g. monthly, bi-weekly)?
• Bonus. Is there a bonus? Is it guaranteed or discretionary? What are the criteria? Get as much in writing as you can.
• Benefits. When do health insurance, pension, and other benefits start—day one or after probation? What's covered? Does the company match pension contributions?
• Review and raises. How often are performance reviews? When is the first opportunity for a raise? You don't need the exact number, but the process should be clear.

Notice and termination

• Notice period. How much notice do you have to give to leave? How much notice does the employer have to give to terminate you? Is it the same for both sides? If you must give 3 months but they give 1 month, you're less protected.
• Probation. How long is the probation period? What's the notice during probation? Does it change after?
• Pay on termination. When you or they end the contract, what are you owed—final salary, accrued leave, bonus, equity? Get a summary in writing.

Restrictive covenants

• Non-compete. Are you restricted from working for a competitor after you leave? For how long and in what geography? In some places non-competes are limited or unenforceable; the contract may still contain them.
• Confidentiality. What counts as "confidential"? For how long must you keep it confidential after you leave? You need to be able to describe your role and skills when job-hunting; the clause shouldn't prevent that where the law allows.
• IP assignment. Does the company claim rights to everything you create during employment—including on your own time? Ask for carve-outs for pre-existing work and for work unrelated to the job.

Practical tips

• Read the whole contract. Don't just skim the first page. The important restrictions are often in the middle or at the end.
• Ask for clarification. If something is unclear—e.g. "discretionary bonus"—ask HR what it means in practice. Get key points in writing if you can.
• BeforeYouSign can highlight pay, notice, non-compete, confidentiality, and IP language in your offer so you know what to focus on and what to ask about before you sign.