Termination Letter Template

This free termination letter template gives US small businesses a short, neutral letter to hand an employee on their last day. It confirms the last day of employment and covers the practical details people need: final pay, benefits, company property, any unemployment notice your state requires, and who to contact. A second page is a termination record for your own files.

What you get

A five-page PDF, sized for US Letter paper, and an editable Word file:

• Page 1: the blank termination letter, with a signature line for the employee to confirm receipt.
• Page 2: a termination record for your files, with a last-day checklist.
• Pages 3–4: both pages completed for a fictional auto repair shop in California.
• Page 5: notes on final-pay deadlines, state notices and health coverage, with links to the sources.

Every detail you need to change is a highlighted placeholder, so you can’t miss one. The Word file starts with the letter, ready to edit and print on your letterhead.

What a good termination letter includes

• The last day of employment. One clear date, in the first paragraph.
• A reason, only if you choose to give one. One or two factual sentences that point to your records, or nothing at all.
• Final pay. When and how the employee will be paid, and what the check includes, such as unused vacation.
• Benefits. When coverage ends, and that a separate notice about continuing it will follow, if that applies.
• Company property. What to return, by when and how.
• Unemployment insurance. The notice or pamphlet your state requires, if any.
• A contact. One name, phone number and email for questions.

How to write a termination letter

1. Confirm the decision. Check that it follows your own handbook and matches how you’ve treated others who did the same thing.
2. Check your state’s final-pay deadline and required notices. Have the final paycheck ready if your state requires payment on the spot.
3. Fill in the letter. Keep it short. Facts and dates, no opinions.
4. Decide whether to include a reason. If you do, keep it to one factual sentence that matches your records.
5. Meet in private, ideally with a second manager present. Keep the meeting short, hand over the letter and any enclosures, and answer practical questions.
6. Ask the employee to sign for receipt. Signing confirms they got the letter, not that they agree with it.
7. Complete the termination record, remove system and building access, and file both pages.

Completed example

The example is a fictional auto repair shop in Sacramento ending the employment of a service advisor after two written warnings. The letter gives the last day and a one-sentence reason that points to the warnings. It encloses the final paycheck, including unused vacation, because California requires immediate payment on discharge. It also lists the EDD notices, the date health insurance ends, the shop keys and uniforms to return, and the owner as the contact. The termination record shows each step ticked off with dates, and one item still outstanding.

Final paycheck deadlines vary by state

Federal law doesn’t require you to pay a former employee immediately, but many states do set a deadline, and they differ widely. For example:

• California requires wages to be paid immediately on discharge (Labor Code 201), and unused vested vacation must be paid as wages at the final rate (Labor Code 227.3).
• Texas requires an employee who is discharged to be paid in full no later than the sixth day after the discharge (Labor Code 61.014).

Check your own state’s rule before the meeting, not after. And don’t make the final paycheck wait on the return of keys or equipment. The pay deadline still applies.

Termination letters in California and other states with notice rules

Some states require written notice when you end someone’s employment. In California, you must immediately give written notice of a discharge or layoff, along with the EDD pamphlet For Your Benefit: California’s Programs for the Unemployed (DE 2320), according to the EDD employer’s guide. The EDD publishes a sample “Notice to Employee as to Change in Relationship” you can use alongside this letter. In New York, you must tell a terminated employee in writing the exact date of termination and the exact date their benefits end, within five working days (Labor Law 195). This letter has a line for each.

Benefits and COBRA

Federal COBRA generally applies to group health plans of employers with 20 or more employees. You must notify the plan within 30 days after the employment ends, and the plan then sends the election notice within 14 days (DOL employer’s guide). Smaller employers may be covered by a state “mini-COBRA” law instead (DOL), so ask your insurer. The letter just tells the employee when coverage ends and that a separate notice will follow.

The employee termination form

Page two is an employee termination form for your files, not for the employee. It records the type of separation and walks you through the last day: the final-pay deadline, final paycheck, benefits, notices, property and system access. There’s room for notes on who was in the meeting and anything still outstanding. Kept with the letter, it shows you did each step and when.

When to get advice first

Pause before you let someone go if they have recently complained about discrimination, harassment, pay or safety, asked for an accommodation, or taken or asked for protected leave. Ending employment soon after can look like retaliation, even when the reason is genuine. Get advice too if the person has a contract, belongs to a union, or your handbook promises steps you haven’t followed. A letter records a decision; it doesn’t make the decision sound.

Not sure what your state requires for final pay or notices? That’s what hrsupport.io is for: HR answers for your state, with the law behind every answer.