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A termination letter isn’t just another HR formality. It’s not a routine HR document. Rather, it’s an official document that marks the final chapter in an employee’s journey with the company.
The letter officially delivers the message that the employment is ending, and wraps it up by including the reason for termination, the last working day, and may include the final settlement details. Hence, if you’re part of the HR team or hold a leadership role, chances are, writing one of these is bound to land on your to-do list.
In this blog, we’ll unpack everything you need to know about termination letters. Why they matter, how to get them right, and correspondingly, how to strike the perfect balance between clarity and professionalism. Additionally, we’ve provided ready-to-use employee termination letter templates, termination letter examples, and various samples to help you draft accurate and effective letters with ease.
Table of Contents
- 1. What is a Termination Letter?
- 2. Why Do You Need a Termination Letter?
- 3. Key Elements of a Termination Letter Template
- 4. How to Write a Termination Letter in 5 Simple Steps
- 5. How Do Employees Receive Termination Letters?
- 6. Termination Letter Templates and Samples
- 7. Final Thoughts
- 8. Frequently Asked Questions
What is a Termination Letter?
A termination letter is a formal document issued by an employer to notify an employee that their employment is being terminated. It is also known as a letter of termination, notice of termination, letter of dismissal, or separation notice.
The employee termination letter is crucial for documenting the reasons for termination, which can become an important factor in resolving any future disputes or legal claims. It also serves as an official record of the termination and provides key details about the employee’s departure. Moreover, by integrating this dismissal letter into your offboarding practice, your company can create a more streamlined, compliant, and structured approach.
Therefore, the termination letter should detail one of the following reasons.
Termination with Cause
An employee may be terminated with cause if they have violated workplace policies or consistently failed to meet performance expectations. For instance, repeated tardiness could justify such a termination.
Termination without Cause
Dismissing an employee without cause usually stems from market factors. For example, you might need to downsize staff due to economic conditions. Similarly, it could be because the employee’s role or department is no longer needed.
Microsoft, for instance, laid off over 6,000 employees in early 2025, representing approximately 3% of its global workforce. This move was part of a strategic shift to prioritize investments in artificial intelligence.
Contract Ended
If the employee’s contract term is ending, the employer can state this as the reason in the contract termination letter. This explanation in the contract termination letter is hence valid regardless of whether the contract was eligible for renewal or not.
In the United States, approximately 74% of the workforce operates under “at-will” employment arrangements, allowing either party to terminate the employment relationship at any time, provided the reason isn’t unlawful.
Why Do You Need a Termination Letter?
Though not mandatory, it is required for most employee terminations. Using a well-structured template ensures best practices are followed by clearly explaining the reason for termination. Furthermore, a termination letter should include all other essential details needed for professional and compliant communication.
A termination letters serve the following purposes:
Legal Safeguarding
Termination letters are important because they protect a company legally in case of a legal challenge or dispute from the employee. This letter should clearly state the reason for termination and when it happened. There should not be any dispute regarding this.
Employers who provide formal termination letters are less likely to face legal disputes. A survey indicated that 70% of businesses using termination letters reported fewer legal issues.
Ensure Proper Documentation
One of the very important reasons to give this letter is due to proper documentation. It also shows that the employer was fair with the employee in their employment practices. A clear and concise termination letter also gives the employees all the necessary information they would eventually inquire about.
Final Arrangements
The termination letter is also crucial because the employer mentions details about the notice period and the final arrangements. This includes information about the return of company assets, along with the expected method and timeline for doing so. It also details when an employee can expect a final paycheck.
Future Reference
Documenting the reasons for termination also ensures the organization can reference them if the employee reapplies in the future. This helps in making an informed decision about their eligibility for re-employment.
Key Elements of a Termination Letter Template
Writing a termination letter isn’t just about informing an employee of their departure; it’s about documenting the process clearly and respectfully. Therefore, when you write a termination letter, there are a few important things to include.
- » Employee’s full name and job title
- » Employee ID number
- » Effective termination date
- » Reason for dismissal
- » HR contact information
- » Remaining benefits
- » Final paycheck details
- » Company property that needs to be returned
- » Legal reminders about confidential agreements
How to Write a Termination Letter in 5 Simple Steps
Writing a termination letter is not difficult if you do it right. Whether an employee is being let go due to company changes or performance issues, following these five simple steps can ultimately make the process smoother for everyone involved.
1. Use a Professional Letterhead
Kick things off with the essentials: the date, the employee’s full name, job title, and department. Use the company’s letterhead. This sets the stage and ensures the letter is properly directed and documented.
2. Be Clear About the Termination
Don’t beat around the bush, be direct but respectful. Clearly state that the employee’s position is being terminated and mention the effective date. No jargon, no fluff.
3. Share the Reason (Briefly)
Whether it’s due to performance issues (termination with cause) or something out of control, like restructuring (termination without cause), give a short, factual explanation to avoid confusion or assumptions.
4. Cover the Final Details
Let the employee know what’s next. Include info on their final paycheck, any unused vacation or sick leave, return of company equipment, and what happens to their benefits.
5. End on a Supportive Note
Wish them the best, and let them know whom to contact for further questions. A little kindness goes a long way, even at the end of the road.
How Do Employees Receive Termination Letters?
HR or managers should ideally hand termination letters in person, either on the employee’s last day of work or at the time of notification if they’re allowed to serve the full notice period.
Employers may mail a termination letter in cases of job abandonment or when safety concerns prohibit the employee from entering the workplace. Businesses should use certified mail to show that they are making a sincere effort to comply with the legal notification obligations.
Termination letter templates and samples
You can write a termination letter for different situations using the following templates and samples.
1. Termination Letter for Poor Performance
[Employee’s Full Name]
[Employee Address]
[Job Title]
[Department]
[Date]
Subject: Termination Letter for Performance Issues
Dear [Employee Name],
We sincerely appreciate your efforts and your willingness to improve in your role as [Job Title]. However, despite our support and ongoing feedback, the necessary progress has not been achieved.
After careful consideration, we regret to inform you that your employment with [Company Name] will be terminated, effective [Termination Date].
Next Steps:
- Final Paycheck: You will receive your final paycheck on [Date], including any accrued leave.
- Benefits: Your health insurance will remain active until [Date]. For details, please contact HR.
- Company Property: Return all company-issued items (e.g., laptop, phone, ID) to HR by [Date].
We thank you for your contributions and wish you all the best in your future endeavors. For any questions regarding your benefits or final compensation, please reach out to HR at [HR Contact Information].
Sincerely,
[Your Name]
[Your Title]
2. Termination Letter for Misconduct
[Employee’s Full Name]
[Employee Address]
[Job Title]
[Department]
[Date]
Subject: Notice of Termination of Employment
Dear [Employee Name],
This letter serves as official notice that your employment with [Company Name] will terminate on [Date of Termination]. This decision has been made due to a confirmed violation of [briefly specify the policy area, e.g., workplace conduct, company property use].
On [Date], it was brought to our attention that you were involved in [brief description of the incident or issue]. This is a direct violation of our [Policy Name] policy, which states: “[Insert brief policy excerpt, if appropriate].”
We take this seriously because such actions can have a negative impact on our team, the workplace, and the integrity of the company as a whole.
[discuss any actions taken, such as an investigation, a conversation with the employee, or a prior warning], the circumstances of the incident leave us with no choice but to terminate your employment.
Next Steps:
- Final Paycheck: In accordance with business policy, your final paycheck, which includes any unpaid earnings and any relevant deductions, will be completed. Please contact HR for more information.
- Return of Company Assets: By [Date], return all company-issued items—including your phone, laptop, access badge, and other equipment—directly to the human resources department.
We acknowledge that this could be challenging, but we have to make sure that every employee works in a respectful, professional, and safe workplace. For any questions regarding your benefits or final compensation, please reach out to HR at [HR Contact Information].
Sincerely,
[Your Name]
[Your Title]
3. Layoff Letter Template
[Employee’s Full Name]
[Employee Address]
[Job Title]
[Department]
[Date]
Subject: Notice of Termination of Employment
Dear [Employee Name],
This letter serves as official notice that, due to [give reasons like company-wide layoff, market conditions, firm restructuring, budget cuts], your employment with [Company Name] will unfortunately terminate on [Date of Termination].
Regretfully, it has been determined that this move will affect your employment as [Job Title]. We would like to thank you for the work you have done while you have been here. This choice was made only after carefully weighing all the options.
We sincerely appreciate the contributions you have made during your tenure with the company.
Next Steps:
- Final Payment: In compliance with business policy, you will receive your final payment on [Date], which will include all wages received as well as any unused paid time off or vacation.
- Benefits: You will remain covered by your health insurance policy until [Date].
- Company Assets: By [Date], surrender all company assets to the HR division, including your ID badge, phone, and laptop.
We recognize that receiving this news may be upsetting, and we are here to help you get through this time. Please do not hesitate to contact the HR department at [HR Contact Information] if you have any queries about your separation, final salary, or benefits.
Once again, we appreciate your service to [Company Name] and wish you the very best in your future pursuits.
Sincerely,
[Your Name]
[Your Title]
4. Termination Letter Sample without Cause
[Employee’s Full Name]
[Employee Address]
[Job Title]
[Department]
[Date]
Subject: Notice of Employment Termination
Dear [Employee Name],
We regret to notify you that, as of [Date of Termination], your employment with [Company Name] will come to an end. We would like to sincerely thank you for your hard work and dedication during your time with us. Please know that this decision was made with careful consideration and was not taken lightly.
Next Steps:
- Severance and Benefits: Kindly provide information on continuation of benefits and severance pay, if applicable. Include the expiration date of your health insurance as well as the HR contact person for further details.
- Final Paycheck: On [Date], you will receive your final paycheck, which will include all earned income as well as any unused sick or vacation time.
- Return of Company Assets: Return all company property by [Date], including your phone, laptop, and access badge.
- Job Search Support: [If applicable, provide information about resources or outplacement programs that can help you transition.]
We want to reassure you that we are here to support you during this change. If you have any issues concerning your final salary, benefits, or next steps, please do not hesitate to contact HR.
We hope your future pursuits are filled with growth and success.
Sincerely,
[Your Name]
[Your Title]
5. Termination with Cause
[Employee’s Full Name]
[Employee Address]
[Job Title]
[Department]
[Date]
Subject: Notice of Employment Termination
Dear [Employee Name],
This letter serves as official notice that, as of [Date of Termination], your employment with [Company Name] is being terminated for cause. The termination is due to [briefly list specific reason for discharge, including dates of specific incidents].
Next Steps:
- Final Salary: On [Date], your last paycheck, which includes any compensation due through your last day of employment, will be processed and deposited. Please be aware that any necessary deductions will be made in compliance with business policy and local labor laws.
- Return of Company Property: By [Date], return all the company property you are in possession of, including phones, laptops, ID badges, and access cards.
- Benefits: Your health benefits will remain in effect until [Date]. For further information, get in touch with HR.
We acknowledge that this may be a challenging circumstance, but this choice reflects the seriousness with which we uphold our company values and policies.
If you have any questions regarding this matter or need clarification on your final pay or benefits, please contact the HR department at [HR Contact Information].
Sincerely,
[Your Name]
[Your Title]
6. Probationary period termination
[Employee’s Full Name]
[Employee Address]
[Job Title]
[Department]
[Date]
Subject: Employment Termination Due to Probation Review Outcome
Dear [Employee Name],
This letter is to inform you that, as of [Date of Termination], your employment with [Company Name] will come to an end. A review of your performance during your probationary period led to this decision.
We assessed your performance in the [Job Title] function throughout this time. We regretfully found that important expectations were not fulfilled, especially in areas like [briefly and objectively identify 1–2 topics, if appropriate]. However, we have not observed the degree of progress necessary to advance past probation, despite your attempts.
Next Steps:
- Final Salary: On [Date], your last paycheck will be deposited, together with any earned income and any accumulated paid time off, if any.
- Return of Company Assets: Return all business property, including your phone, laptop, and access badge, by [Date].
We wish you luck in your future pursuits and value the time and effort you have put into the position.
Please get in touch with [HR Contact Information] if you require further information or have inquiries concerning your final salary, benefits or compensation.
Sincerely,
[Your Name]
[Your Title]
7. Letter of Contract Termination
[Employee’s Full Name]
[Employee Address]
[Job Title]
[Department]
[Date]
Subject: Notice of Employment Termination (End of Contract)
Dear [Employee Name],
This letter serves as official notice that, as per the terms of the contract you signed on [Start Date of Contract], your employment with [Company Name] will terminate on [Date of Termination].
We sincerely appreciate the contributions you have made during your time with us. Your efforts have been welcomed and appreciated, particularly in areas like [name specific accomplishments or qualities, if applicable].
Next Steps:
- Final Payment: In accordance with your contract, you will get your last payment, which will include any unused vacation or sick leave. On [Date], this will be credited to your account.
- Return of Company Assets: Return all company assets, including your ID badge, phone, and laptop, to the HR department by [Date].
- Benefits: Your health coverage will, if applicable, continue through [Date].
We wish you continued success in your future career. If you have any questions regarding your final paycheck, benefits, or next steps, feel free to reach out to [HR Contact Information].
Sincerely,
[Your Name]
[Your Title]
Final Thoughts
It is never easy to terminate an employee, but when necessary, a well-written termination letter can help. The letter explains the reasons for the termination, completes the necessary paperwork, such as final pay and the return of company property. This process ensures a respectful and orderly conclusion to the employment relationship.
Whether you are terminating someone for performance reasons or simply downsizing, this letter serves as your shield of professionalism. However, just because it is a serious business letter,does not mean it has to be cold; instead, be empathetic and strike the right balance. At the end of the day, people remember how you made them feel, even when you are showing them the way out through a termination letter.
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Frequently Asked Questions
Q1. | What is a termination letter? |
| Ans. | A termination letter is an official notification from an employer informing an employee that their employment is ending. It contains important details such as the reason for the termination, the last working day, and information about the final payment. |
Q2. | Is it mandatory to give a letter of termination? |
| Ans. | There is not always a legal requirement for employers to give a written termination letter, but it’s usually a good idea. A termination letter clearly tells the employee that their job is ending and explains the reasons, their notice period, and other important information. This helps avoid misunderstandings and can protect the company legally. |
Q3. | What should be included in an employee termination letter? |
| Ans. | A dismissal letter should clearly mention the last working day, the reason for ending employment, information about final pay and benefits, and instructions about returning company assets. The letter should be written respectfully and professionally, with a tone that is direct yet empathetic. |
Q4. | Can I use a free termination letter template? |
| Ans. | You can use a free termination letter template, but it’s important to review it thoroughly and consider getting advice from a legal expert before sending it. While free templates can be helpful, they might not address all legal rules or fit your specific situation perfectly. Hence, refer to the free templates provided by Empxtrack. |
Q5. | What is a termination letter example? |
| Ans. | A termination letter example is a sample or template of a formal letter used by employers to notify an employee that their employment is ending. It usually includes key details like the reason for termination, the last working day, information about final pay and benefits, and instructions for returning company property. Examples help guide employers on how to write a clear, professional, and respectful termination notice. |
Q6. | What is the difference between termination with cause and without cause? |
| Ans. | A “without cause” letter is used when employment ends due to company reasons like downsizing, restructuring, or changes in the organization. This is not related to the employee’s performance or behavior. On the other hand, a “with cause” letter is issued when an employee is dismissed because of poor performance, misconduct, or policy violations. For example, frequent absences after several warnings may lead to a “with cause” termination. Both types clearly explain the reason for ending the employment. |
Q7. | Can a contract employee be terminated? |
| Ans. | Yes, a contract employee can be terminated. Their employment usually lasts for a fixed period or until a specific project is completed. Termination can happen if the contract ends naturally, or earlier if there’s a valid reason, such as a breach of contract or poor performance, depending on the terms agreed upon in the contract. |
Q8. | Are there different types of termination letter formats? |
| Ans. | Yes, a termination letter format is not limited to just one type. There are many types of it. The most common ones include termination with cause (due to employee misconduct or poor performance) and termination without cause (due to market factors or company reasons like downsizing). Other formats include letters for the end of contract, termination during probation, termination letter due to layoff, and more. Each format is tailored to the specific reason for ending the employment and includes relevant details accordingly. |
Q9. | What is a probationary period termination letter? |
| Ans. | A probationary period termination letter is an official communication from an employer to notify an employee that their employment will end during the probationary period. Furthermore, this letter is issued when an employee’s performance or behavior does not meet company expectations. It may also be used if the employer decides to end the probation period for other business-related reasons. |
Q10. | How do I handle layoffs with a termination letter? |
| Ans. | Managing layoffs requires clear communication and following all legal and company rules. A key part of this process is the termination letter. It gives the employee important information about their job ending, including the reason, the last working day, and what to expect next. |
Q11. | Does Empxtrack application have termination letter templates? |
| Ans. | Yes, Empxtrack provides a variety of email templates for termination letters. These templates can be easily customized to suit different termination scenarios and company policies. |
This is a well-written and informative article. Termination letters are often a sensitive and complex aspect of HR, and this post does a great job of highlighting both the legal and human considerations involved. I especially appreciate the emphasis on clear communication and maintaining professionalism throughout the process. Including practical examples and templates is a helpful touch for HR professionals navigating these situations. Looking forward to more such insightful content from Empxtrack.