Termination Letter Template Explained: What to Include

Ending an employment relationship is never easy for either party. It often involves high emotions, potential legal risks, and the logistical challenge of ensuring a smooth handoff. Without a clear termination letter template, managers often struggle to find the right words, leading to misunderstandings or, worse, costly litigation.

The solution lies in a structured, professional approach that prioritizes clarity and empathy. A sample termination letter template helps make sure the required details are not missed while keeping the message clear and respectful. This blog explains how to write a letter of termination that supports the business and gives the employee clear next steps.

The Purpose of a Termination Letter Template

A termination letter creates a clear written record that an employee’s role has ended. It removes confusion by stating the timing and reason in plain terms. More than a notice of dismissal, a termination letter also explains what happens next, including details about final pay and benefits.

Using a consistent job termination letter format also helps maintain a fair standard across your organization. When every manager uses the same draft letter of termination of employment, it reduces the risk of discrimination claims because the process remains uniform for everyone.

According to the EEOC, there were over 88,531 charges of workplace discrimination filed in 2024 alone; having a standardized termination letter template is a key step in workforce planning and analytics to mitigate such risks.

Key Elements Every Termination Letter Template Needs

A well-drafted letter of termination of employment should be concise but comprehensive. Here is what you must include:

• Employee Information: Full name, employee ID, and current position.
• The Effective Date: Clearly state the last day of work to avoid confusion.
• Reason for Termination: Whether it is a layoff, performance-based, or for cause, a work termination letter should be honest. If the employee was previously on a PIP template, then referencing that history can provide necessary context.
• Compensation and Benefits: Detail the final paycheck date, including any accrued vacation time or severance pay.
• Company Property: List items that must be returned, such as laptops, keys or ID badges.
• Next Steps: Provide HR with contact information to handle questions about COBRA or 401(k) rollovers.

Using a termination letter example as a starting point ensures you don’t miss these critical logistical details.

What Not to Include

While it is important to be thorough in a termination letter draft, it is equally important to know where to draw the line. Avoid using overly emotional language or personal attacks. This is not the place to vent frustrations, and doing so can provide “ammunition” for a wrongful termination lawsuit.

Do not include vague promises about future employment or verbal agreements that are not backed by company policy. A discontinuation of employment letter should stick strictly to the facts. Avoid mentioning age, race, religion, or any protected characteristics, as this can inadvertently signal bias. Keeping your employment termination letter professional is a simple way to avoid these expenses.

Voluntary vs. Involuntary Terminations

It is important to distinguish between a notice of termination letter (involuntary) and an end of employment letter following a resignation (voluntary).

1. Involuntary: This is an immediate termination letter to an employee or a layoff notice. It is initiated by the employer.
2. Voluntary: This is triggered by the employee’s resignation. While you may still send a termination of appointment letter sample as an acknowledgment, the tone is generally more celebratory of their time with the company.

For involuntary cases, especially performance-related ones, having data from automated workforce management systems can help justify the decision with objective metrics, making the letter of dismissal template much easier to write and defend.

Documentation Best Practices

A termination letter sample is only as good as the documentation supporting it. Before you issue a termination letter to an employee, ensure you have a complete file of their performance reviews, warning letters, and any relevant emails.

• Consistency: Treat all employees in similar situations the same way.
• Timing: Deliver the letter of termination as soon as the decision is final.
• Privacy: Deliver in a private setting to maintain the individual’s dignity.
• Verification: Request that the employee sign a copy of the termination letter to acknowledge receipt. If they refuse, note it on the document with a witness present.

Data from the Bureau of Labor Statistics shows that the “total separations” rate in the US hovered around 3.2% in late 2025, highlighting how common this process is for modern businesses.

Conclusion

Writing a termination letter can feel uncomfortable, but it can be handled straightforwardly. A clear termination letter template helps protect the company while giving the employee clear information about what happens next. Keep the message professional, focus on facts and include practical details such as final pay and the return of company items.