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Severance agreement template

Severance agreement: A severance agreement records the terms on which employment ends, typically a payment to the employee in exchange for a release of claims.

Last reviewed 6 November 2026 · 6 clauses · General guidance, not legal advice

Upload yours for a review and e-signature, or save it as a team template.

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When to use a severance agreement

  • Redundancies or restructuring
  • Agreed exits for senior staff
  • Settling a dispute when employment ends

Severance agreement template: clause-by-clause outline

Sample starting wording for each clause. Replace the text in [brackets] with your details.

  1. Termination date

    The Employee’s employment will end on [date].

  2. Severance payment

    The Employer will pay [amount], less required deductions, within [14] days of the effective date.

  3. Release

    In exchange the Employee releases the Employer from all claims arising from the employment and its termination, to the extent permitted by law.

  4. Return of property

    The Employee will return all company property and information by the termination date.

  5. References and announcements

    The Employer will provide an agreed reference and announcement in the form attached.

  6. Advice and review period

    The Employee confirms it has had [the legally required period] to consider this agreement and to take independent advice.

What to check before you sign

  • Does local law require independent legal advice or a review period for the release to be valid?
  • Are statutory entitlements paid in addition to the severance?
  • Are any claims that cannot be waived excluded?

Signing formalities: In some countries a settlement with an employee is only valid with independent legal advice or approval by an authority.

How to send a severance agreement for e-signature

  1. Draft or upload it. Use the outline above with your own wording, upload an existing document, or save it as your organisation’s template.
  2. Check it against your playbook. Points outside your positions are flagged, and approval rules route it to Legal when needed.
  3. Send it by email. Signers get a plain-language review and a secure link, sign on any device in the order you set, and can suggest changes as tracked changes.
  4. Keep the signed PDF. Everyone receives it with a certificate of completion, and key dates go to Upcoming with reminders.

Severance agreement template: frequently asked questions

Can an employee waive all claims?

Not always. Many countries make certain rights non-waivable or require specific formalities, such as legal advice, for a valid waiver.

Is severance pay taxable?

Usually in part. Tax treatment differs by country, so state that payments are made subject to required deductions.

Is an electronically signed severance agreement legally binding?

Often, but not always. In some countries a settlement with an employee is only valid with independent legal advice or approval by an authority. econtracts.ai shows the rules for the contract’s governing law before you send it.

Can I get a severance agreement I received reviewed?

Yes. Upload it to econtracts.ai and you get a plain-language review: key dates, money and points to check, each quoting the clause it comes from.

Related contract templates

Settlement agreement templateSettlement agreementRelease of liability templateRelease of liability (waiver)Employment contract templateEmployment contract

This outline is a starting point for discussion, not legal advice, and it is not a complete contract. Laws differ by country and sector; have a qualified lawyer review contracts that matter.