Termination letter templates and best practices

Disclaimer: This content focuses on a United States-based audience, is for general informational purposes only, and does not constitute legal advice. Leapsome does not guarantee legal compliance and cannot confirm how specific situations would be assessed in court. If you're unsure how the requirements apply to your organization, please consult qualified legal counsel.

A termination letter is a formal document that tells an employee their time at the company has come to an end. In the United States, these letters serve as a legal record of fair termination, and they must explain the terms of and reasoning behind the decision in clear language, leaving no ambiguity on why the employee was let go. Whether it was because of gross misconduct or an unfortunate side effect of restructuring, the letter should document the entire situation and detail their next steps.

Decades of research has shown that poorly conducted layoffs often result in reputational damage, burnout, and resignations from remaining team members.* Well-written employee termination letters are one of the easiest ways to start the termination process with transparency and respect, reducing the likelihood of these negative consequences. 

This guide explains how to structure your termination letter writing process for a consistently compliant and scalable approach, complete with three termination letter templates to simplify one of the hardest tasks in HR.

* SHRM, 2025

What’s a termination letter?

A termination letter is a formal written record notifying an employee that their employment relationship with the company is over. It puts the termination on a firm legal footing and gives both employer and terminated employee something concrete to point to in case of future disputes or legal challenges.

Separation letters typically include roughly the same key details (like the termination’s effective date, the reason for termination, and next steps), but it’s important to change your tone and approach, depending on the circumstances. The major termination categories include:

• Termination with cause: When written warnings don’t rein in repeated company policy violations or misconduct, employers may decide to terminate an employee with cause.

• Termination without cause: A company ends an employment relationship for reasons unrelated to the terminated employee’s behavior or performance, such as budget cuts or restructuring.

• Termination with severance: This is a specific type of termination without cause in which employers pay out a severance package in accordance with the employment contract or company policy. It’s common for layoffs, but not terminations with cause.

You don’t need to write a termination letter when an employee quits (also known as voluntary termination). Instead, you’ll need to collect a resignation letter from them, which serves the same purpose.

Why termination letters matter

“Overwhelmingly, I’ve seen that these [social media] posts [of workers being fired] are in response to a feeling of surprise. Without an understanding of why they were fired or any inclination that it was on the table for consideration, employees feel blindsided and that it was unfair.”

— Parker Gilbert, CEO and co-founder at Numeric.io, for SHRM

Poorly written employee termination letters can hurt your organization’s reputation and expose you to unnecessary legal risk. The only worse move is not sending a letter at all. 

There are a few reasons why it’s so critical to get these notices right: 

• Respects employees and safeguards reputation: A clear, professional employment letter of termination that explains exactly why the employee’s getting fired and what will happen next reduces confusion during an emotionally charged moment. Taking a people-first approach to these letters, like specifying if the employee is eligible for unemployment and/or COBRA benefits, helps them feel like the company cares about their well-being and dignity. Maintaining fairness also bolsters the company’s reputation as a workplace that treats its people with respect, even on the way out.

• Reduces legal risks: Disputes and compliance issues are less likely to arise with a dated formal record in place. This documentation generally makes wrongful dismissal or retaliation claims easier to defend against if a terminated employee pursues legal action down the line. 

• Creates a paper trail: Termination notices formalize critical details like the date and reason for termination in plain language on paper. This reduces the risk of miscommunication between you and your former employee, and creates a shared reference point for offboarding steps.

A paper trail is only as good as the data it documents — and data is only as good as your system for wrangling it. Leapsome creates a central source of truth for all your organization’s information, so you can point to specific reasons for the termination from engagement surveys to performance reviews across the employee lifecycle.

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🖥️ Keep employee data comprehensive and accessible 24/7
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Leapsome keeps everything from employment contracts to termination letters in a single centralized location, so you can access every detail of the employee lifecycle at a moment’s notice.
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👉 Explore Employee Records

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Three termination letter templates to get the ball rolling

“Credibility comes with behavior. People are looking for tone, authenticity, approachability.” 

— Steve Browne, Chief People Officer, LaRosa’s, Inc.

Termination letter examples and templates can make HR’s job a lot easier, even if you only use them as a starting point. Here are three samples to get you started for some of the most common termination types: misconduct, poor performance, and layoffs.

Termination with cause: Misconduct

[Date]

[Employee’s name]

[Employee’s job title]

[Employee’s address]

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Subject: Termination of employment

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Dear [employee’s name],

This letter is a formal notification that your employment with [company name] is being terminated effective [date] due to repeated violations of company policy and serious misconduct. In particular, [specific reason(s) for termination, including dates, incident reports, and references to specific company policies violated]. Written warnings and corrective actions, starting on [date] and most recently on [date], have not brought your conduct in line with company standards of behavior.

You will receive your final paycheck on [date] by direct deposit. We will pay out unused vacation days at a rate of [amount] in accordance with company policy. 

If you have questions, please contact me directly at [phone number] or [email address].

Sincerely,

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[Your name]

[Your job title]

[Your company name]

Termination with cause: Poor performance

[Date]

[Employee’s name]

[Employee’s job title]

[Employee’s address]

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Subject: Termination of employment

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Dear [employee’s name],

This letter is a formal notification that your employment with [company name] is being terminated effective [date] due to consistently missed performance targets.

On [date], we collaborated on an improvement plan to address weaknesses in [specific areas, such as productivity or client communication] with specific goals and progress milestones. Unfortunately, your performance did not improve to meet company standards.

You will receive your final paycheck on [date] by direct deposit. Your benefits will remain in effect until [date], after which you will receive a COBRA continuing coverage notice. You may be eligible for unemployment insurance benefits. Contact your state’s unemployment office for information on how to apply. Please return all company property by [date].

If you have questions, please contact me directly at [phone number] or [email address].

Sincerely,

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[Your name]

[Your job title]

[Your company name]

Termination without cause

[Date]

[Employee’s name]

[Employee’s job title]

[Employee’s address]

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Subject: Termination of employment

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Dear [employee’s name],

This letter is a formal notification that your employment with [company name] is being terminated effective [date] due to restructuring. This decision was not taken lightly and is not a reflection on your performance or workplace conduct.

You will receive your final paycheck on [date] by direct deposit, along with your severance pay. Note that your confidentiality and non-compete agreements remain in effect.

If you have questions, please contact me directly at [phone number] or [email address].

Sincerely,

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[Your name]

[Your job title]

[Your company name]

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📉 Back termination decisions with performance data
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Leapsome stores performance history and manager feedback alongside all the other key data that makes termination decisions defensible.
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👉 Explore Performance Reviews

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How do you write a job termination letter? A three-step guide

The hardest part of terminating an employee is navigating the conversation. Let HR team members and managers who have to take that step focus on their delivery, and streamline your job termination letter process by building templates. Following a structured process to prepare each letter of termination of employment reduces some of the mental load of this difficult task.
Here’s how to put one together in three steps. 

1. Gather supporting documentation

“Get really clear on why instead of throwing your hands up and saying, ‘Because we have to.’”

— Emma Leeds, CEO and Founder of People Function

To start, compile everything you’ll need to fully inform the employee and lock down compliance, including:

• Employment history details: Start date, role changes or promotions, and current position.

• Performance info: Performance and probation reviews, and employee development plans.

• Incident reports: Past company policy or misconduct violations and how HR handled them.

• Written warnings: Records of verbal or written warnings.

2. Craft the termination letter

“Treat people like smart adults. Don’t try and gaslight them into thinking this is actually good.” 

— Melanie Naranjo, Chief People Officer at Ethena

Receiving a termination letter from an employer is hard. Write the letter with a tone that’s respectful and supportive, but don’t beat around the bush. Make it clear what’s happening in the very first sentence after the salutation, then go into the reason for termination. Clearly outlining the reason isn’t just a best practice: It’s legally required in some parts of the United States.

Finally, explain the next steps. Will they have to complete an exit interview or survey, and what can the employee expect if so? When will they get their last paycheck? 

When your draft is ready, run it by the legal department to verify compliance and defensibility. They’ll use their legal expertise to find any holes you might’ve missed.

Pro tip: Automate exit surveys with Leapsome to cut down on your HR team’s workload.

3. Deliver the letter face-to-face

Giving termination letters to employees in person (or, for remote companies, over a Zoom call) shows respect. Sending termination letters over email when you see them face-to-face every day is impersonal and can make employees feel like discarded resources rather than people. Terminations in real time also give the terminated employee a chance to ask questions instead of ruminating and close the relationship on a high note.

Choose a quiet, private location to safeguard the employee’s privacy. During the meeting, be clear, but be respectful too. Keep notes about this last interaction and include them in the employee’s file to further strengthen any documentation, especially if anything goes awry.

Streamline and standardize your termination process with Leapsome

The best way to keep employment termination a fair and legally defensible process is by ensuring every detail has a clear paper trail. No one wants to terminate employees at scale, but as your company grows, your team likely won’t have the resources to spend days meticulously crafting a perfect termination letter — especially if they have to track down individual data points from email chains and managers’ personal notes. 

Leapsome simplifies tracking everything from performance reviews and feedback to corrective actions so everything is locked and loaded when the time comes to write a termination letter. By centralizing HR processes and employee records, HR teams can build fair and consistent workflows that leave terminated employees feeling valued and respected.

“My primary goals were to build an ongoing feedback culture, improve conversations about performance and better understand competencies across the company.” — Nadja Kaderli, People and Culture Manager at Advertima

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🔗 Avoid last-minute data scrambles with unified records and processes
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Leapsome combines core HR processes like performance reviews and exit surveys with a database of all your important employee information, so your people operations stay seamless from start to finish.
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👉 Request a demo

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Disclaimer: This content focuses on a United States-based audience, is for general informational purposes only, and does not constitute legal advice. Leapsome does not guarantee legal compliance and cannot confirm how specific situations would be assessed in court. If you're unsure how the requirements apply to your organization, please consult qualified legal counsel.

FAQ

What are employee termination notices?

Termination notices, also called termination letters, formally notify employees that their employer is ending the employment relationship. They often clarify why the terminated employee is being let go, and include details that protect the organization during legal disputes by serving as a clear record of events.

What does a professional employee termination letter include?

A termination letter is generally sent to the terminated employee on official letterhead and includes a few key components:

• A line giving the employee formal notice of termination
• Reasons why they’re being terminated
• Termination effective date
• Information about how to collect their final paycheck, PTO payout, and severance (if applicable)
• Details about their remaining benefits, including COBRA coverage
• Company contact information

Scroll up to the section “Three termination letter templates to get the ball rolling” for sample termination letters covering some of the most common termination scenarios.