Writing an Employment Contract Termination Letter [with Sample]

There are a few basic rules that have to be followed whenever an employment contract termination letter is being written. 

As long as those rules are followed, the rest of the letter can be different based on the circumstances and your company. Let us take a detailed look at what must be in each contract termination letter.

Employment Contract Termination Letter Basics:

– Each letter must have your name and address in the top corner. This is crucial because the letter must state who has written it and which company / business / association this letter is in reference to. This establishes authority in the letter.

– The date should also be present on the letter. This date is not the date when someone is fired or when their contract is cancelled, but the date of sending the letter. So, if you are firing someone on the 4th of January, you might be sending the letter on the 1st or the 2nd.

In that case, you will put down the 1st or 2nd of January as the letter date. In most cases a notice period of several days is given before the contract is terminated. This is considered a “grace period”.

– Use some form of greeting before the body of the letter is written. This greeting does not need to be overly kind or formal. “Dear” is typically the most common form of greeting. However, the person’s name can also suffice. For example, “Mr. Person”, is sufficient as the greeting for a contract termination letter.

– This is the most crucial part of the letter: the body. This is where you will talk about why the person’s contract is being terminated and what the other circumstances are. There is no rule to how long the body must be. 

It does not have to be more than one paragraph. However, most termination letters will consist of at least a couple of paragraphs, so everything can be explained sufficiently.

A statement such as “On the __ of ___ the contractual agreement between Company __ and Person __ will be officially terminated. This termination is occurring as a result of clause ___ in Person ___’s contract.” should always be included in the body. This signifies the termination in a formal manner.

– Contact information at the bottom is something that should be displayed. At times a phone number is enough, but if you have an email address then put that down as well. This should be followed up with a “if you have any questions please contact me” statement.

– Close the letter off with an end greeting such as “Sincerely” or “Greetings” and type up your name. You can choose to sign your name as well, to give the letter an even more formal look.

– Make sure the letter is mistake proof and has been read through a few times. This is an official firing document so you do not want any mistakes to be there. Any errors can be used against you by the person you are terminating the contract with.

General Tips:

Make sure that everything is stated clearly in the letter. If some event has caused this termination, there is no harm in stating the event briefly. Do not go into too many details, as it is best to stick to the facts and keep something simple when possible.

Another suggestion for termination letters is that you mention how long the person has worked at the company. This can be a way to start the letter. For example: “Person __ worked at Company __ for ___ years/months/weeks. Unfortunately due to certain event(s) we are going through the contract termination process.”

Sample 1 – Employment Contract Termination Letter


Mr. Aaron Williams
1060 Revello Drive
Madison, WI 53719

Dear Mr. Williams:

This letter confirms our decision pursuant to our discussion today that your employment with State Street Family Chiropractic, Ltd., is terminated effective immediately.

As you have been employed with State Street Family Chiropractic for more than one year, you will receive two weeks’ severance pay, which will be paid to you once you have signed and returned the enclosed Release of Claims document.

Your accrued vacation time will be paid at your current hourly rate and paid with your next pay check at the end of our regular pay period, next Friday, January 18.

You may pick up your check in the business office, or if you desire, we can mail it to your home. You will be mailed a separate benefits statement explaining the status of your benefits after termination.

Thank you for returning the company-owned pager and building keys at the termination meeting. Please keep your contact information up to date with the business office so that we can provide you with tax documents when they become available.

Please let us know if we can assist you in any way during your transition.


Gina Lawson
Practice Manager, State Street Chiropractic, Ltd.

Sample 2 – Employment Contract Termination Letter

Subject: Employment Contract Termination

Dear [Name of Employee]:

This letter is formal notice that your probation period with [Name of Company] is being terminated effective on [DATE]. 

We have decided that you have not fulfilled the conditions of employment because of your lack of enthusiasm for the job, not fulfilling the tasks given you and not showing the skills in computer programming that you claimed on your resume. 

According to the terms and conditions of the probation letter that you signed, the company may terminate you with 48-hours notice within the six-month probation period.

I request that you return your mobile phone and laptop to your immediate supervisor, and attend an exit interview at 3pm on [DATE] at my office. You will get your final paycheck at that time and sign some termination documents. 

You may speak freely during this meeting. I am sorry you did not take advantage of the support and help we gave you to make your employment a success. However, I wish you success in your future endeavors.

Thank you for the time you have given to [Name of Company].


Name of Human Resource Person
Name of Company

Disclaimer: This post is only for informational purposes and does not intend to replace expert legal advice.

Frequently Asked Questions (FAQs)

Q: What is an employment contract termination letter?

A: An employment contract termination letter is a document used to end an employment contract, usually initiated by an employer. It outlines the reasons for termination, the date of termination and any severance pay or other benefits.

Q: What should be included in an employment contract termination letter?

A: An employment contract termination letter should include the following information:

  • Date of the letter
  • Employee’s name and address
  • Reason for termination
  • Date of termination
  • Details of any severance pay or other benefits
  • Information on COBRA or unemployment benefits

Q: What are the common reasons for employment contract termination?

A: Common reasons for employment contract termination include:

  • Job performance issues
  • violation of company policies
  • resignation
  • redundancy or downsizing
  • end of a fixed-term contract
  • mutual agreement between employer and employee

Q: What is the difference between termination and resignation?

A: Termination refers to the ending of an employment contract initiated by the employer, while resignation refers to the decision of an employee to voluntarily end their employment.

Q: Is an employment contract termination letter required by law?

A: No, an employment contract termination letter is not required by law, but it is considered a best practice to provide written documentation of the termination to the employee.

Q: Can an employee contest a termination in court?

A: Yes, an employee can contest a termination if they believe it to be unlawful, such as being based on discrimination or retaliation.