Termination letter template
Copy the text below and replace everything in square brackets with your company details.
[Company Name]
[Office Address]
[City], [State] [PIN Code]
Date: [Date]
Ref: [Company Code]/HR/TER/[Year]/[Number]
Confidential
To
[Employee Name]
[Designation], [Department]
Employee ID: [Employee ID]
[Residential Address]
Subject: Termination of employment
Dear [Employee Name],
You have been employed with [Company Name] as [Designation] since [Date of Joining]. [State the basis by reference to the record, choosing one: Following the domestic inquiry into the charge sheet dated Date, the inquiry officer's report dated Date, a copy of which was given to you on Date, and after considering your representation dated Date / Following the performance improvement plan from Start Date to End Date and the review meeting on Date, the outcome of which was shared with you in writing on Date / Following the closure of the Unit or Department, as communicated in the notice dated Date], the company has decided to end your employment.
Your employment will end on [Last Working Day]. [Choose one: Under your appointment letter you are entitled to [Number] days' notice, which runs from today, and you will remain on duty and on the payroll until that date. / In place of notice, the company is paying you [Number] days' wages, and you need not attend work after today.]
[For retrenchment of a worker with at least one year of continuous service, add: This retrenchment is for the reason stated above. You are given one month's notice in writing, or one month's wages in lieu of notice, and you will be paid retrenchment compensation of ₹[Amount], calculated at 15 days' average pay for each of your [Number] completed years of service.]
Wages for your final period of work will be credited within two working days of [Last Working Day]. A full and final settlement statement, covering [leave encashment, gratuity if eligible, bonus and any other amount due] and any recovery you have agreed to in writing, will follow as per law and company policy.
Please return your ID card, laptop, documents and all other company property to [Name or Department] by [Date] and complete the exit formalities. Your relieving letter and service certificate will be issued on completion.
[Where the standing orders or conduct rules provide an appeal: You may appeal against this decision in writing to [Appeal Authority Name and Designation] within [Number] days from the date you receive this letter.]
Yours sincerely,
For [Company Name]
[Signatory Name]
[Signatory Designation]
Acknowledgement
I have received this letter. Signing confirms receipt only.
Name: [Employee Name]
Signature: ____________
Date: ____________
What to include
Basis stated by reference to records
Refer to the inquiry report, the performance plan outcome or the retrenchment decision by date, and to when the employee received it. Do not describe misconduct or failures beyond what those records establish.
Notice or pay in lieu
State the notice period from the appointment letter, or the wages paid in lieu of it, and the exact last working day. A termination without either is the easiest to challenge.
Retrenchment rules
For retrenchment of a worker with at least one year of continuous service, give one month's written notice with reasons or wages in lieu, and compensation of 15 days' average pay per completed year.
Dues and their timing
Wages are due within two working days of the last working day. Name the other dues in the settlement and follow a clear full and final settlement process.
Neutral wording
Keep the language factual and brief. Words like fraud, cheating or theft, unless they are the exact finding of a completed inquiry, can expose the company to a defamation claim.
Appeal route where rules provide it
If your standing orders or conduct rules allow an appeal, name the authority and the time limit. It gives one more internal check before the matter reaches a labour authority.
Common mistakes to avoid
- Terminating for misconduct without a show cause notice and inquiry.
- Describing the employee's actions in stronger words than the inquiry report uses.
- Leaving out notice or pay in lieu of notice.
- Holding back wages until the laptop or ID card is returned.
- Paying retrenchment without the one month's notice or compensation the law requires.
Run it in ZeniaHR
ZeniaHR does not generate termination letters. HR records the exit through offboarding on the employee record: the matching exit reason from the structured list, the last working day and the 8-item exit checklist. In Direct Payroll, paid days for the final month stop at the exit date, encashable leave balances add a payroll earning, and the settlement and gratuity reports help HR check the final dues. The signed letter is stored in the employee's documents.
See it on your own data
A 30-minute demo on a video call. We set up your departments, shifts and leave rules and show attendance, leave and payroll running for your team. Free for your first 50 employees.
Book a free demoSee pricingFrequently asked questions
What should a termination letter include?
It should include the date of joining, the basis for termination with a reference to the documents on record, the last working day, notice or pay in lieu of notice, how wages and other dues will be settled, the return of company property, the relieving letter and any appeal route. Keep the wording factual and short.
Is notice required before terminating an employee in India?
In most cases, yes: the company gives the notice stated in the appointment letter or pays wages in lieu of it. For retrenchment of a worker with at least one year of continuous service, the law requires one month's written notice with reasons or wages in lieu, and compensation of 15 days' average pay per completed year.
When must final wages be paid after termination?
Final wages must reach the employee within two working days of the exit, whatever the reason for it, as the Code on Wages provides. The rest of the settlement, including leave encashment and gratuity where eligible, should be closed promptly under law and policy, with an itemised statement to the employee.
What is the difference between termination and dismissal?
Dismissal is a penalty for proven misconduct after a disciplinary inquiry. Termination is the wider term for any ending of employment by the employer, including for performance, redundancy or under the notice clause. A dismissal letter must refer to the inquiry findings; other terminations must follow their own notice and settlement rules.