People Management

Termination Letter: Tips and Templates for Your Business

Employee terminations are necessary to manage a workforce, especially in small and growing businesses, where the right people can make all the difference. Once you’ve conducted a dismissal meeting, you can use one of our termination letter templates to streamline the process and end the working relationship professionally and empathically.

After an employee dismissal meeting, HR professionals typically issue an employee termination letter to end the working relationship.

Despite the difficult situation, a well-crafted dismissal letter conveys important information to the dismissed employee and wishes them well. These termination letters can also protect the organization, help the departing worker follow internal HR policies, and ensure a smoother transition.

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How to Write a Termination Letter

When composing a termination letter, be clear, concise, and professional. Start by directly stating that the individual’s employment will end, specifying their final date of employment.

In the body of the letter, clearly state the reason for the termination. There’s no need to get too in-depth; stick to objective facts. You can refer to relevant company policies or the employment agreement if applicable. However, avoid subjective statements or details that might be considered opinions.

When writing the dismissal letter, Include specifics about compensation or unresolved issues. These may include severance pay, benefits, unemployment benefits, and instructions for completing final tasks or returning company property. 

Finish by providing a point of contact for questions and closing the letter courteously. You can thank the employee for their service and wish them well in their future endeavors. 

Send the letter on company letterhead and have it signed by the appropriate manager or HR representative. 

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Legal Requirements for Termination Letters

It is essential to note that in all states except Montana, the prevailing employment arrangement is at-will employment. It means that the employer or the employee can end the employment relationship at any time and for any reason.

However, many states require some form of written separation or termination communication. These regulations promote transparency and fairness in the dismissal process. They also help minimize potential legal complications and ensure that workers are informed about their rights and obligations after departure from a company.

Although specific state requirements vary, common threads include the reason for termination, final paycheck information, and continuation of health benefits, if applicable.

Some states require that companies use specific termination letter templates. In contrast, others have particular requirements for mass layoffs or plant closings under the federal Worker Adjustment and Retraining Notification (WARN) Act. Be sure your termination letters include details and best practices consistent with your state’s regulations. 

Different Types of Termination Letters

From job offer letters to employee referral letters, HR professionals have a lot of paperwork to assist with talent acquisition. In the same way, termination letters help with employee offboarding, depending on the reason for dismissal. Common examples include:

  • Termination for cause: An employee is let go for a specific reason (poor performance, misconduct, or violation of company policies).
  • Layoff or reduction in force: When an employee is dismissed, not through fault of their own but for restructuring, economic reasons, or elimination of their position.
  • End of contract or temporary employment: These letters confirm the expiration date of a contractor or temporary employee’s agreement.
  • Mutual agreement: These documents are when both parties have agreed to end the working relationship.
  • Furlough letter: This is for when employees are temporarily on unpaid leave due to particular business circumstances, such as economic downturns or organizational challenges.

While the general formats are similar, each type of letter often has different content and tones.

With termination for cause, more detail is usually required.

Layoff notices may include information about severance, and end-of-contract letters will reiterate the agreed-upon timeline.

Termination by mutual agreement affirms a consensual decision and creates a record for your company.

Furlough letters typically outline the terms of the furlough, including its expected duration and any changes to employment benefits or conditions during the period.

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Termination Letter Best Practices

When drafting separation or termination of employment letters, keep these tips in mind:

  • Be concise and stick to the facts
  • Avoid emotional or accusatory language
  • Be clear about all logistics and the next steps
  • Deliver the letter promptly and discreetly after dismissal
  • Keep a copy for company records

5 Termination Letter Templates for Your Business

Having suitable separation templates on hand can be extremely helpful when terminating employment. Using a consistent process and creating a paper trail helps HR teams avoid discriminatory or retaliatory language that could lead to legal issues. Well-crafted letters can also help HR teams quickly tailor letters for specific situations without starting from scratch each time.

A well-written termination letter also shows the matter is handled seriously and respectfully. It can also organize the essential details so you and your team can easily reference them. Here are five helpful templates for various termination requirements within your growing business.

1. Termination for Cause Letter Template

Dear [Employee Name],

This letter serves as notice that your employment with [Company Name] is being terminated, effective [date], for [reason].

[Provide details about the reason, such as poor performance, misconduct, or policy violation. If applicable, reference previous discussions, warnings, or performance improvement plans.]

Your final paycheck will be [deposited/mailed] on [date] and will include [pay/benefits details]. [Outline any other outstanding logistical issues, such as benefits, company property, or confidentiality agreements.]

Please contact [HR representative] with any questions or to arrange the return of company property.

We wish you the best in your future endeavors.


[Manager/HR Signature]

2. Layoff Termination Letter Template

Dear [Employee Name],

I regret to inform you that your employment with [Company Name] is being terminated, effective [date], due to [restructuring/economic conditions/elimination of your position]. This decision does not reflect your performance but is based solely on unavoidable business realities.

Your contributions to our team and company have been greatly valued. [If applicable, provide details of any severance, continued benefits, or job search support provided.]

Your final paycheck will be [deposited/mailed] on [date] and will include [pay/benefits details]. Please contact [HR representative] to arrange the return of company equipment and property.

We are available to answer any questions and will support your job search efforts in any way we can. Thank you for your service and commitment to [Company Name].


[Manager/HR Signature]

3. End of Contract Termination Letter Template

Dear [Contractor Name],

This letter confirms that your contract assignment with [Company Name] will conclude as planned on [date].

Please submit your final invoice by [date] and arrange to transition any pending deliverables with [supervisor name]. Company equipment and badge should be returned by your last day.

Thank you for your work on [project/team]. It has been a pleasure having you as part of our extended team. Please stay in touch and let us know if you want to be considered for future contract opportunities.

We wish you continued success in your next engagement.

Best regards,

[Manager/HR Signature]

4. Mutual Agreement Termination Letter Template

Dear [Employee Name],

We appreciate your [length of service] of dedicated service to our organization. Your contributions to [specific projects or achievements] have been particularly noteworthy.

Per our discussions, you will receive [details on any agreed-upon severance, benefits continuation, or other transition support]. Your final paycheck will be [deposited/mailed] on [date] and will include [pay/benefits details].

Please coordinate with [HR representative] to complete the required exit paperwork and return of company property by [date].

Thank you for your professionalism in reaching this mutual agreement. We wish you all the best in your future endeavors and hope you will stay in touch.


[Manager/HR Signature]

5. Furlough Letter Template

Dear [Employee Name],

Due to the unprecedented impact of [situation, such as economic downturn or public health crisis] on our business, we have made the difficult decision to place you on temporary furlough effective [date]. We expect this furlough to last [estimated period], but will provide updates as the situation evolves.

During the furlough period, you will remain an employee of [Company Name] but will not perform work duties or receive a salary. [Explain the impact on benefits, such as health insurance, PTO accrual, etc., and any support the company provides.]

We understand this is a challenging time and are here to support you. Please contact [HR representative] with any questions about furlough logistics or to access employee assistance resources.

We hope to resume normal operations soon and return you to active work status. We value your contributions to our team and look forward to welcoming you back.

Thank you for your understanding and resilience in navigating this difficult period with us.


[Manager/HR Signature]

Wize Words

Termination letters can help smooth offboarding with professionalism, clarity, and compassion. Your HR department can customize our templates to create consistent and risk-mitigating letters more efficiently. These letters tactfully conclude the working relationship by documenting important details with care, communicating transparently, and providing supportive measures.

Frequently Asked Questions

How long should a termination letter be?

Termination letters should generally be one page long or less. Your goal is to convey the core information concisely—not give an exhaustive play-by-play. Stick to the essential points about termination dates, reasons, logistics, and support. You could provide more details in a follow-up communication as needed. A short letter ensures that your message is clear while leaving room for more detailed discussions where necessary.

When should a termination letter be sent?

Send the termination letter promptly, usually immediately after the termination meeting. Your prompt action can help eliminate any confusion about the status of the employee’s dismissal. By issuing the letter right after your meeting, you reinforce the finality of the decision and allow the terminated employee to plan their next steps.

Can a termination letter be emailed?

Yes, you can certainly email a termination letter. Many companies deliver termination notices via email for efficiency and documentation purposes. However, ensure the email is sent from a company email account and includes all necessary details, such as the reason for termination, effective date, and any relevant next steps or instructions. Additionally, it’s essential to follow any legal or company-specific protocols regarding termination procedures.


  • Ryan Lawrence

    Ryan Lawrence is a highly experienced HR writer who’s spent two decades covering diverse workplace topics for small- and mid-size businesses. With a keen eye for detail, he delves into the complexities of human resources, focusing on the trends impacting the workplace and giving HR professionals actionable solutions.

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The article was reviewed by Deirdre Sullivan

Ryan Lawrence

Ryan Lawrence is a highly experienced HR writer who’s spent two decades covering diverse workplace topics for small- and mid-size businesses. With a keen eye for detail, he delves into the complexities of human resources, focusing on the trends impacting the workplace and giving HR professionals actionable solutions.

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