6 Free Employee Termination Letter Templates (2025)

Nobody enjoys writing a termination letter, but having a solid one in place makes the process smoother, more professional, and legally sound. Whether you’re letting someone go due to performance issues, misconduct, or layoffs, a well-structured letter helps set the right tone and avoids misunderstandings.

Now, you might think, Can’t AI just generate one for me? Sure, it can—but that’s risky. AI can make mistakes, misinterpret key details, or produce something so generic that it feels like a low-effort formality. That’s not the impression you want to leave, especially when some employees are being let go through no fault of their own. A sloppy or impersonal approach can damage your employer brand and make an already difficult moment worse.

That’s why using a pre-made, professional termination letter template is smarter. In this article, we’ll cover what makes a good termination letter, answer employee termination letter FAQs, and provide 6 free templates for different situations, including layoffs, performance-based terminations, and contractor agreements. These templates will help you handle employee departures smoothly while keeping things clear, professional, and legally sound.

Key Components of a Termination Letter

A well-structured termination letter maintains professionalism, legal clarity, and a smoother transition for both the employee and your company. It should provide all necessary details to prevent misunderstandings and protect both parties.

Here’s what every termination letter should include:

Employee’s Name and Position

It might seem obvious, but it’s essential to clearly state the employee's full name and their job title right at the start of the letter. This removes any confusion and makes sure there’s no doubt about whom the letter is for and confirming their role within the company. It’s a simple yet important step that helps avoid any potential misunderstandings down the line.

Termination Date

The termination date is perhaps the most crucial detail in the letter. It indicates the official end of the employment relationship time, and this is vital for a few reasons. First, it helps guarantee that payroll processes are aligned and that any final payments are made correctly. Second, it sets the stage for any benefit terminations and lets you know you're adhering to any notice periods required by law or company policy.

Reason for Termination

While you don’t have to go into detail, it's a good idea to include a reason for the termination (it's not mandatory in the US in most cases—we'll get into that). Whether it's due to performance issues, misconduct, or something like company downsizing, providing a reason gives clarity to the employee and helps reduce any confusion or ambiguity. When it comes to layoffs or redundancy, the best approach is to keep it neutral and professional. A clear explanation helps you maintain goodwill and respect, especially if the employee was let go through no fault of their own.

Final Paycheck and Benefits

Employees will naturally want to know what to expect regarding their final paycheck. Be sure to mention the specifics here—will they be paid for unused vacation days, or receive a severance pay? If they’re entitled to bonuses or health-care benefits after termination, make sure those are addressed too. 

Returning Company Property

As part of the offboarding process, it’s important to ask for the return of any company property. This could be anything from laptops and ID badges to office keys or confidential documents. Be clear about what needs to be returned and by when, and include any instructions for shipping or delivery.

HR Contact Details for Follow-Up

Even after the termination, the employee might have questions. Whether it’s about paperwork, employee benefits, or their final paycheck, offering an HR contact is a great way to keep the communication channel open. This shows that you're still willing to provide support during the transition and makes sure any remaining issues are addressed professionally.

What Not to Include in a Termination Letter

While it’s important to be clear, certain details should be avoided in a termination letter. Overly emotional or personal comments can make the process more difficult for both parties. Avoid excessive detail about performance failures or conflicts, as these should already be documented elsewhere. The letter should also steer clear of apologies or language that could imply wrongdoing on the company’s part, which might create legal risks. Finally, any promises about future reemployment or references should not be included unless they are part of a formal agreement.

Regarding the “Good Luck in Your Future Endeavors” part

Finishing a letter with a “we wish you the best in your future endeavors” is remarkably common. Almost every HR department uses it, and it shows up in automatic and carefully written emails alike. It's used frequently by HR representatives, even beyond termination letters. As such, it sometimes arrives in a jobseeker's inbox months after the candidate applied because the HR rep is telling them they've been rejected for the position. Since it's everywhere, it can certainly strike as hollow and slightly trite.

Our templates, of course, include the phrase. But if you're thinking of doing something different, you should consider skipping that catchphrase altogether.

7 Rejection Email Templates (That Will Protect Your Employer Brand) →

Do You Need to Give an Explanation of Why you Let Someone Go?

No. In most cases, you don't need to explain why you let someone go. When an employee is hired “at will,” courts deny the employee any claim for loss that results from the dismissal. Generally, it is held that an employee may leave their job without reason or warning. This makes it reciprocal.

But our templates include some explanation frameworks in case you want to keep a relationship going.

Free Employee Termination Letter Templates

Employee terminations need clear, precise communication to guarantee legal compliance and show professionalism. Below, you’ll find essential termination letter templates for various situations. Each letter should start with your company’s name and address, followed by the employee’s name, address, and the date. We’ll provide just the body. Finish with your name, title, and company name to sign off formally.

General Employee Termination Letter

This one’s your go-to for situations where there’s no specific cause for the termination. It hits all the necessary points: notifying the employee of their termination, mentioning the effective date, and giving them the details about their final pay and benefits.

💡 You can use an asset management solution to record every item the employee has and then arrange to retrieve it.

Termination Due to Performance Issues

When an employee’s performance isn’t meeting expectations, this sample termination letter helps you outline the issues clearly. It references any previous warnings or discussions you’ve had with them and specifies the termination date. It’s a direct yet fair way to handle situations like this.

Termination Due to Misconduct

In cases where the termination is due to misconduct, you’ll want to be very specific. This template helps you document the actual irregularities that led to the decision in a way that it lines up with your company’s policies and stays legally compliant.

❓ Do you need to explain why you're letting the employee go? No, not really. In numerous instances, it's just a matter of courtesy (this depends on the market but holds true in the US). If the employee breached your agreement, and you don't want anything to do with them, you can skip mentioning their misconduct.

➕ This is also true for layoffs. Companies rarely explain why they're laying an employee off. They just communicate it on a call or an email. In some markets, lawyers just show up at the offices and request (departing) employees to sign a piece of paper and turn in the company laptops (this sounds like dystopic corporate slander, but it actually happens).

Layoff Letter

While it’s always best to communicate layoffs in person to show care and respect, there are times when a formal letter is necessary for documentation purposes. But remember, relying on letters alone—especially in mass layoffs—can look impersonal. For instance, Better.com faced major backlash after laying off employees via Zoom, which shows just how important it is to keep that personal touch. If you do need to follow up with a letter, make sure it includes the reason for the layoff, the effective date, any severance, and benefits continuation details.

Termination of Contract Letter

If you’re ending a contract with a contractor, this template is designed to make sure everything is covered. It clearly states that the contract is ending, specifies the effective date, and provides any relevant info about final payments and the return of company property.

Immediate Termination Letter

For situations requiring an instant dismissal, such as severe misconduct, the employee must be terminated effective immediately. When a situation calls for an immediate dismissal, this template gets straight to the point. It communicates the immediate end of employment, explains the reasons for the decision, and outlines what happens next, like final compensation and returning company assets.

Use HR Software to Onboard and Offboard Employees

Handling employee terminations is never easy, but a carefully prepared termination letter signals clarity and professionalism and keeps compliance in check. If you choose to use short, clear, and precise language, you can avoid ambiguity and make the termination process less hectic for both your company and the departing employee. On top of this, if you feel unsure about the specifics of a termination or handling sensitive issues, it’s always wise to seek legal counsel.

While AI-generated letters might seem like an easy fix, they can come off as impersonal and lack the thoughtful consideration required in such sensitive matters. Instead, using professional templates helps be sure that every detail is covered so that your employer brand is protected, and you can be sure you're compliant with all necessary regulations.

If you're looking to take your offboarding process to the next level, consider using TalentHR’s people analytics and performance management tools. These tools provide key insights into employee performance trends that can help you identify patterns that can improve future hiring and retention strategies. TalentHR is an all-around solution that allows companies to both onboard and offboard employees. If you're considering expanding or shrinking your workforce, you should consider trying it.

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