How to Write an Employee Termination Letter (With What to Say and What to Avoid)

The termination letter is one of the most consequential documents an employer produces. Written poorly, it creates legal exposure — an admission that can be used against you in a wrongful dismissal claim, or language so vague it leaves the employee confused about their entitlements. Written well, it documents the termination professionally, protects the business, and treats the employee with the dignity that any employment ending deserves.

What to include in a termination letter

Date and employee information

State the date the letter is being issued and include the employee's full name and job title. This establishes the timeline — when the decision was made and communicated.

The effective date of termination

State clearly the last date of employment. This is the date on which the employment relationship ends, the employee stops accruing benefits, and their access to company systems should be revoked. Do not leave this ambiguous.

The reason for termination (clearly but carefully stated)

Whether you are terminating for cause (conduct or performance reasons) or without cause (redundancy, business reasons, probation not passed), the letter should state the reason plainly and without unnecessary elaboration.

For cause terminations: reference the specific performance or conduct issues, the documented warnings previously issued, and the standard the employee failed to meet. Keep this factual and specific. "Failure to meet the performance targets established in the performance improvement plan dated March 1, 2026 despite three documented review meetings" is better than "unsatisfactory performance."

For without-cause terminations: state that the employment is being terminated without cause and note that it does not reflect on the employee's personal conduct. This is both accurate and important — it affects the employee's ability to claim unemployment benefits, their reference, and how they communicate the departure to future employers.

Final pay and outstanding entitlements

Confirm when and how the employee will receive their final pay, including: outstanding wages, accrued unused vacation pay, any severance if applicable, and reimbursable expenses. Confirm the method of delivery — direct deposit on the regular pay date, or a manual cheque issued on the last day of employment.

Know your state's final pay laws. Many states require final pay to be delivered on the last day of employment for employer-initiated terminations. Failure to pay on time can result in penalties. The termination letter should confirm compliance with these requirements.

Benefits continuation

Note the status of benefits — health insurance, retirement plan contributions, any other applicable benefits — and the effective date on which they will end. If the employee is eligible for COBRA continuation coverage, note that they will receive separate COBRA paperwork within the legally required timeframe.

Return of company property

List the company property the employee must return — laptop, keys, access cards, vehicles, tools — and specify when and how it should be returned. For employees terminated and leaving immediately, collect property before they leave the building.

Confidentiality and non-solicitation reminder

If the employee signed a confidentiality, non-solicitation, or non-compete agreement, remind them that these obligations continue post-employment and reference the agreement. This is a reminder, not a threat — it is standard language that ensures the employee is aware of their continuing obligations.

What to leave out of a termination letter

Do not include excessive apologies or expressions of regret that undermine the business's position. Do not speculate about the employee's future prospects or provide unsolicited advice. Do not include detailed justifications that go beyond the documented facts — more words create more opportunities for legal challenge.

Do not include anything you would be uncomfortable reading aloud in an employment tribunal. If the language is emotional, speculative, or personal rather than factual, revise it.

Delivery of the termination letter

Deliver the termination letter in person, in a private meeting with at least one other management or HR representative present. Provide the employee with a copy and retain a signed copy (acknowledgement of receipt, not agreement) for the personnel file. Follow up with an email containing the letter attached, to create a documented delivery record.

The meeting should be brief and professional. Announce the decision, explain it in one or two sentences, provide the letter, answer logistical questions about final pay and property return, and close the meeting. This is not an appropriate time for an extended discussion of performance or conduct history — that has happened already in the documentation process.