How To Write a Termination Letter

Many businesses have a human resources department or HR professionals that handle their company’s termination process. Whether you’re an established business owner or an entrepreneur who is just getting started, follow this step-by-step guide to learn what termination letters are used for, what they should include, and how to make your own with our free template.

What Is a Letter of Termination?

A notice of termination, also called a termination letter, is a formal document typically used by employers to let go of employees. A termination notice letter is commonly used in the following situations:

• At-will employment terminations (employee can be let go for any reason, as long as the termination decision is based on legal grounds)
• Termination “for cause” (misconduct, policy violations, ongoing poor performance issues)
• Terminations “without cause” (reduction in force, layoffs, restructuring, position elimination)
• Ending fixed‑term employment contracts or probationary periods

The main purpose of a solid termination letter is to provide a written record of an employee’s termination to legally protect the employer in case of future legal disputes or unemployment claims. A well written termination letter:

• Confirms the termination date and basic facts
• Summarizes the reason for the decision
• Explains next steps (final compensation, when employee benefits, like healthcare insurance, will end, the return of any company property, and contact information in case the former employee has questions later)

What Should You Include in a Termination Letter?

The legal requirements as to what should be included in a formal letter of termination may vary based on state law, contracts, and specific company policy. Generally, termination letters have:

• Basic employee information, like full name and job title
• Basic employer information, like company name, phone number, and address
• Effective date of termination and employment details, such as the last day of employment and whether the termination is effective immediately
• Whether there is a notice period or pay in lieu of notice
• Clear statement of termination, like a direct sentence stating, “This letter confirms that your employment with [Company] will end on [date]” and the reason for termination, such as a brief, factual statement about performance, misconduct, policy violation, or business reasons like downsizing or restructuring
• Factual reference to prior steps taken if the termination is for cause, like a short summary of prior warnings, performance improvement plans, investigations (consistent with internal documentation, if any)
• Info about final pay and benefits, like when and how the employee will receive their final paycheck, whether unused PTO or vacation will be paid out, any severance pay if offered, what happens to health insurance, COBRA or continuation options, and retirement benefits
• Instructions about company property and access, like a list of items to be returned (keys, ID badge, laptop, phone, credit card, business documents, etc.) and how to return property and disable work accounts and access
• Ongoing legal and contractual obligations, sch as reminders of any confidentiality or non-disclosure agreements, non-competes, non-solicitation, or intellectual property agreements
• Practical next steps and HR contact information for who the employee should contact with questions about benefits or final pay and how to request copies of personnel records if permitted under state law

When writing a termination letter, be professional and use clear and polite language along with a neutral tone. Be concise to avoid creating a long and lengthy document. Usually, one page is enough to write a comprehensive termination letter. Avoid speculating and leave out any personal opinions. If you decide to include details about the reason for termination, many employers choose to keep it fairly high‑level to reduce legal risk. Others employers may prefer to include specific and detailed information for their own records.

Write Your Termination Letter Using Our Free Termination Letter Template

If you think you’re ready to write a termination letter, you can use our termination letter example to help you get started.

What Should You Do After You Write a Termination Letter?

Once you complete the termination letter, proofread it for accuracy and make sure any information provided about the reason the employee is being terminated matches their employee file. It’s also important to confirm that the termination complies with any applicable federal, state, and local requirements. Make sure you keep a record of the letter and any documentation supporting the termination and follow your company’s offboarding process. Our Firing an Employee – FAQ answers many common questions about letting go of an employee.

You can find more information about business laws by checking out FindLaw’s Small Business Resources. If you’re still unsure about creating your own termination letter or have additional questions, talk to a business lawyer who can help.

Disclaimer: The information presented here does not constitute legal advice or representation. It is general and educational in nature, may not reflect all recent legal developments, and may not apply to your unique facts and circumstances. Consider consulting with a qualified business attorney if you have legal questions.